ENABLE Enabling dematerialised access to information and ... › wp-content › uploads › 2018 ›...

1

Co-funded by the Justice Programme of the European Union

"ENABLE – Enabling dematerialised access to information and assets for judicial

enforcement of claims in the EU

NUMBER — 721331 — ENABLE

National report - Bulgaria

Chapter I: Introduction

1. Basic Characteristics of the Profession

The civil enforcement legislation of Bulgaria presently provides a dual system of judicial

enforcement: state enforcement officers (SEO) within the system of the judicial branch and

private enforcement officers (PEO) who are independent legal professionals, organized within

the Bulgarian Chamber of Private Enforcement Officers (hereinafter “The Chamber”). The

structure and status of either type of officers are respectively stipulated: by the Judicial

Authority Act (art.264-278) for the SEO and Private Enforcement Officers Act1 for the PEO.

Both types of enforcement officers are subject to the same procedural rules and instruments

with regard to their enforcement prerogatives and professional activities. These are regulated

by the Code of Civil Procedure (CCP). The system of the state officers is a remnant of the

former state system of judicial enforcement office with factually diminishing functions. There

are 216 active state enforcement officers appointed by the Minister of Justice. The state officers

are salaried employees within the structure of the district courts. Their remuneration is not

dependent on the results of their work. Being state employees, the liability for any procedural

omission or irregular action is borne by the state, therefore the state would not grant to the state

officer the right of a “professional initiative”, resulting in state officers not being allowed to

undertake enforcement by own discretion (both protective measures and direct execution)

without an explicit request from their creditor. It is a fact that the concept of the 2005 judicial

enforcement reform was to establish judicial enforcement in Bulgaria entirely as a liberal

profession, performed by independent individuals licensed and controlled by the state. The

language of the initial draft bill (introduced on September 17, 2004, filing index 454-01-74)

provided for a 3 year transitional period after which the function of civil enforcement was to be

performed solely by PEOs. Notwithstanding that, the state enforcement system continued to

exist with ever diminishing efficiency as de facto grandfathered status quo mostly due to the

lack of political will to accomplish the reform.

The subject of present the report is limited to the status and professional activity of PEO.

SEO function under the auspices of the court system and their operational structure as well as

functional prerogatives and service interactions are a matter of internal management of the

respective court, therefore neither the operational internal rules, nor the logistical infrastructure

therewith (including electronic systems) represent a public record.

1 Private Enforcement Officers Act (Prom., SG№ 43/ 20.05.2005, in force since 01.09.2005, last amended SG№

49/29.06.2012)

2


Private enforcement officers are licensed by the Ministry of Justice (MJ) private individuals

compliant with certain statutory requirements. The jurisdiction of a PEO is limited to the

territorial jurisdiction of the respective provincial court. There are 28 provincial courts in

Bulgaria. The statutory principle of allocation of PEOs is that there should be 1 PEO per 30

000 people for the respective provincial district. By the end of 2016, there are 202 licensed

private enforcement officers in Bulgaria. The usual case of a PEO’s office in Bulgaria is a

professional team consisting of a PEO, one or more deputies (up to three per PEO), clerical

personnel and process servers. Assistant PEOs are licensed through a testing procedure by the

Chamber (under the supervision of the Ministry of Justice). The 2016 Annual Report of the

Chamber shows that more than half of the PEOs have empowered assistants. There are 201

assistant PEOs throughout the country. In broad stokes, the assistant (under an employment

agreement) may exercise all of the procedural prerogatives of a PEO. There is a joint civil

liability, borne by the PEO and the assistant, for any damages caused by the assistant’s unlawful

actions.

The number of the respective PEO’s personnel could vary considerably but a fair estimate

would be that on the average a large office (typical for the capital city of Sofia and the three

major cities of Plovdiv, Varna and Burgas) would be from 20 up to 50 employees. About 4 to

5 offices countrywide operate with more than 50 employees. The typical PEO’s office would

have from 5 up to 15 employees on the average. In general the case is PEOs to operate as sole

professionals, an exception being 6 professional partnerships nationwide, consisting of 2 or 3

partners.

1.1. Professional Status

A Bulgarian PEO must hold degree in Law, 3 yrs. of professional experience as well as to

answer to a number of statutory requirements related to good professional and civic standing as

well as lack of a conflict of interest. Two major eligibility categories may be set out as

prerequisites to obtain the capacity of a PEO:

1.1.1. Professional standards

The professional standards are set forth in PEOA. The PEO is a person to whom the state

has assigned the enforcement of civil claims. The state may also assign the PEO to execute the

collection of public dues the latter being a variety of taxes, customs and/or commodity duties,

fines, litigation costs, etc.

A set of specific professional requirements are stipulated by art. 5 & 6 PEOA). PEO status

requires the capacity of a legally capable physical person, who is a Bulgarian citizen in

compliance with the following qualifications:

1. Academic education in law at Master’s level (JD equivalent);

2. License pursuant to the Judicial System Act to practice law;

3. Minimum of three years' juridical practice;

4. Absence of convictions to imprisonment on felony charges, regardless of

expungement (rehabilitation);

5. License as PEO not being previously revoked;

6. Not being disbarred or banned to conduct certain commercial activities;

3


7. Not being bankrupt or in proceedings thereof and has not been convicted of

bankruptcy;

8. Having passed a PEO entry test.

1.2. Incompatibility. The capacity of PEO is also inconsistent with:

1. The office of MP, minister, mayor or municipal councillor;

2. The office of a state or municipal employee;

3. Being employed on a salaried position;

4. Law practice (attorney/barrister/solicitor).

5. Notary practice;

6. Bankruptcy trustee practice;

7. Performing commercial activity, holding a managerial or executive position on a

corporate board.

1.1.2. Ethical Standards – stipulated by the Code of Professional Ethics. The code is an

“in-house” act i.e. internal regulations of the Chamber adopted by the General Assembly of the

Chamber.

Within the frame of the above referenced standards, as well as within the limitations of their

territorial jurisdiction, PEOs in Bulgaria function in a state of competition among themselves.

For instance, 12 PEO registered in the Burgas province (administrative district) exercise their

marketing efforts within all statutory and ethical limitations to attract cases from both private

and institutional creditors having titles and sanctioned enforceable claims related to the

jurisdiction of Burgas province.

According to art.7 PEOA the Chamber Council renders an opinion on the public trust

enjoyed by each of the candidates. Although the positive formal opinion of the Chamber is an

absolute prerequisite for granting a professional license, there is no definition in the law what

“public trust” is. This problem is a vivid example of “imported legislation”. Bulgarian PEOA

has been basically modelled after a Dutch legal framework under the expertise of several

European and American experts. While in UK, USA, France and other Western European

countries categories as “public trust” or “good moral character” are understood by default due

to a millennia of moral tradition, this is not the case in Bulgaria. Presumably that phenomenon

is due to the fast and hardly planned transition from a highly centralized communist rule to a

democratic state of personal freedom and market entrepreneurship at the end of the eighties and

the beginning of the nineties of the 20th century. This is a deficiency that has demonstrated its

effect again and again through the years. That does not mean that Bulgarian society and/or legal

profession profess exceptionally different moral standards in comparison to the rest of the

world, but when it comes to a formal criterion to be applied for a professional license to be

granted or revoked, there is a certain deficiency of regulation, which requires resolution.

PEOs are subject of control by a dual administrative system. The State Inspectorate within

the MJ is the government controlling authority. The Ethical Commission and a Disciplinary

Board within the Chamber of Private Enforcement Officers are the guild bodies in charge of

monitoring, control and implementation of disciplinary measures.

1.2. Remuneration

4


The income of the PEOs is formed by a combination of fixed fees as well as pro-rata fees

based on the collected amount of dues as regulated by a Tariff. PEOs may conduct and direct

the enforcement procedure by their own initiative upon general authorization by creditor

according to article 18 of Private Enforcement Officers Act (May 10, 2005). On the balance, a

PEO is liable for any professional misconduct and illegal action that has ensued damages on

one’s entire property (the latter not preventing potential disciplinary and/or criminal liability).

In terms of organizational entities, PEOs in Bulgaria function predominantly as sole

practitioners. Regardless of being provided by law (art.30 of Private Enforcement Officers

Act), professional partnerships of PEOs in Bulgaria are few. As previously stated there is a hole

of 6 partnerships, which are consisted of up to 3 partners each.

2. Overall e-Justice strategy environment in the country in relation to enforcement.

2.1. Court structure

The court structure in Bulgaria is outlined comprehensively in the European e-Justice

Portal.2 For the purpose of clarity and coherence, present review uses the structural terminology

used by this database, i.e. first instance courts are district courts, the next (upper) level courts,

acting as courts of first and second instance, are provincial courts and etc. Each Bulgarian court

maintains a website, which provides information both on the court's structure and activities and

on cases past and present. The website of the Supreme Judicial Council provides a detailed list

of the courts in Bulgaria, alongside with their addresses and websites (available in Bulgarian

language only). The web sites of the court in most cases are operational and in good functional

condition. Compared to the situation in the late 80ties and the 90ties of the last century the

possibility for a remote access to case information is a significant step forward to a streamlined

case management both for the court authority and for the litigants and their representatives.

Nonetheless, the bigger picture of the Bulgarian e-justice environment reveals a necessity for

significant improvement. Compared to the most advanced e-justice national systems, the

Bulgarian juridical environment bears substantial deficiencies of automated means for e-justice

implementation. The period from the inception of democratic changes and market economy,

hence – genuine rule of law, from 1989 up until the first decade of 21 century, was marked by

more or less sporadic developments of automated management systems within different

branches of the judicial administration and the court system, which has not been unified by a

single concept or a common strategy.

2.2. Statutory framework

Presently existing fundamental statutory planning on government level is relatively new. It

provides a promising legislative frame, but yet lacks detailed mechanisms for practical

implementation in technical regulations and is especially deficient in terms of logistical

(network, hardware, software and etc.) capacity. The statutory framework consists of Strategy

for the Introduction of E-government and E-Justice in the Justice Sector 2014-2020 (adopted

by Decision of the Council of Ministers No 531 of 21.07.2014) with a Roadmap containing

detailed technical and budgetary breakdowns and E-Justice Concept Containing the Principles,

Objectives and Phases of its Implementation (adopted by the Council of Ministers decision of

2 https://e-justice.europa.eu/content_judicial_systems_in_member_states-16-bg-en.do?member=1

5


21.11.2012). In implementation of the strategy, the following legislative sources have been

either adopted or amended and adapted to comply with the Strategy:

- Electronic Governance Act (E-Governance Act) (SG 46/12.06.2007, in force -

13.06.2008 last amendment SG 62/9.08.2016, in force 1.07.2016)

- Electronic Identification Act (SG38/20.05.2016г., in force - 21.11.2016 last amendment

SG101/20.12.2016)

- Electronic Document and Electronic Signature Act (EDES Act) (SG34/06.04.2001, in

force - 06.10.2001, last amendment SG101/20.12.2016)

- Judicial Authority Act (amendments to) (SG 64/07.08.2007г., in force - 3.04.2009, last

amendment SG 14/10.02.2017) Chapter 18 “a”

- Regulation of the General Requirements for Network and Information Security

(Adopted by Council of Ministers, Decree No 279 of 17.11.2008, in force - 25.11.2008,

Amended, SG No. 5/17.01.2017)

- Regulation of the Requirements for the Unified Environment for Exchange of Electronic

Documents (Adopted by Council of Ministers, Decree № 158 of 2.07.2008, prom. SG

62/11.07.2008, amended, SG 58/30.07.2010, in force - 30.07.2010)

2.2.1. By Decree No 665 from October 13th 2000 the Council of Ministers approved and

introduced into Parliament an Electronic Document and Electronic Signature Bill which in fact

was the first substantial piece of legislation on e-governance and it also laid down the statutory

base for electronic exchange of and access to information via authentic and binding legal

statements and claims as well as exercising legal authority over one’s rights of property or claim

over such. The law basically follows the framework of the Directive 1999/93/EC of the

European Parliament and of the Council of 13 December 1999 on a Community framework for

electronic signatures. The bill granted to the Council of Ministers the liberty of indicating when

and which subordinate administrative bodies will be obliged to accept and issue electronic

documents signed with an electronic signature, thus gradually extending the scope of the law

(depending on technological readiness of individual administrative bodies) and in the area of

administrative law.

2.2.2. Given the requirement for legal proceedings to be settled by a statute, the extension of

the scope of the law and in the field of litigation was meant to be achieved by amending and

supplementing the relevant procedural laws: the Code of Civil Procedure, the Code of Criminal

Procedure, the Code of Administrative Procedure, the Administrative Violations and Sanctions

Act, the Taxation and Social Security Procedural Code. As a matter of fact, those pieces of

legislation have been quite sparsely changed or adapted in order to implement electronic

statements, documents and signatures with the exception of recognizing the notification via e-

mail as a valid service of information to a party in proceedings. The application of the latter is

restricted by the condition of a preliminary formal consent of the party on a case by case basis,

which in practice limits any tangible effect of such regulation.

Thus the Code of Civil Procedure in its section 4, chapter 14 (Written Evidence), art. 184

regulates the presentation of an electronic document as evidence in court with dominant

assurance that a paper venue may be used as an alternative: “1.The electronic document may

6


be presented reproduced in hard (paper) copy certified by the party. Upon request, the party is

required to submit the document electronically. 2. If the court has no technical means and

specialists enabling the reproduction of the electronic document and for a reliable check of the

electronic signature … electronic copies of the document shall be provided to each party. In

this case, the authenticity of the electronic document may be challenged at the next court

hearing.” Such language reveals not only the traditional conservative approach to innovations

but also the lack of capacity of the courts to process electronic data reliably for the purpose of

gathering evidence and adjudicating a case.

The Council of Ministers designates its subordinate bodies which: 1. cannot refuse the

acceptance of electronic documents signed with Universal electronic signature; 2. may not

refuse to issue a document in electronic form, signed with a universal electronic signature,

permits, licenses, approvals and other administrative acts.; Sec.2. Acceptance and issuance of

electronic documents signed by a universal electronic signature, in the judicial system are

governed by law3….” has been repealed in 2011, presumably for the lack both of administrative

and logistical capacity to implement the obligations of the respective authorities in practice.

The other state institutions, which are not subject to the Council of Ministers (such as the

National Assembly, the Constitutional Court, the National Audit Office, the Bulgarian National

Bank, the State Securities Commission, the Commission for Protection of Competition etc.),

municipalities and mayoralties were granted the freedom to introduce the practice of electronic

exchange by their own acts, if and when those institutions deem appropriate.

Since the adoption of the EDES Act the exchange of binding information and statements

signed by electronic signature have found wide implication in the private sector. Areas of

application are electronic banking and other electronic transfer of funds and securities,

invoicing, exchange of auditing and managerial data. The implications in the government

sector are quite limited compared to other more technologically advanced countries, and yet it

marks a remarkable development compared to the bureaucratic stalemate in the administration

typical for the late 80ties and the 90ties. Instances for use of electronic signature and automated

interaction with government registers (and other databases) for filing and extracting information

include but are not limited to:

- Tax filing and archive references to tax records for entities and physical persons

(National Revenue Agency);

- Requesting and obtaining data in the debtor’s tax dues by state authorities and

enforcement officers (National Revenue Agency);

- Data exchange between hospitals and other health providers with the National Health

Financial Authority;

- Requesting and obtaining data in the debtor’s social security withholding (employment

record) by state authorities and enforcement officers (National Social Security Institute);

3 Presumably the bill for amendment of the Judicial Authority Act

7


- Access to civic records - database managed and hosted by the local municipal

governments;

- Requesting and obtaining data from the National Central Bank for bank accounts and

safe deposit boxes by state authorities and enforcement officers (enforcement officer’s

prerogative);

- Attachment of registered corporate shared in the Commercial Register (enforcement

officer’s prerogative);

- Notarial Registry for wills, powers-of-attorney, forged instruments;

- On-line communication between each notary public and the Commercial Register for

data exchange regarding all registered circumstances related to corporate (shares, stocks,

capital, financial reports and etc.) ownership, which are subject to notarial verification and

registration by statute;

- On-line access to the personal ID Register, hosted by the Ministry of the Interior (notary

prerogative)

- On-line access to the Civic Register (prerogative of notaries and enforcement officers)

2.3. Implementation of the e-justice initiatives on a national level

2.3.1. Although IT developments in the judicial process have been amply debated and

formally regulated in the course of the last decade, the practical implementation of the e-justice

mechanisms as well as working implications of an integrated e-justice system at a national level

are very limited. For instance, there is a Unified e-Justice Portal (https://ecase.justice.bg/)

where there is active connection to just 10 out of 113 district courts and 8 out of 28 provincial

courts. The user registration provided by the system does not allow on-line registration but

rather a paper filing in the respective court. Another function of the portal

(http://legalacts.justice.bg/), allows access to judicial orders and decrees with no username and

password requested, since judicial acts are public domain by law, but documents are often

uploaded with delays, searches are neither reliable nor conclusive. A common problem of that

and similar systems (such as the web platforms of each court) is that not all of the services

formally offered are responsive and functional. Needless to say, translations in other EU MS

languages are a rare exception.

2.3.2. The EC 2017 Technical Report4 (summarized infra for the purpose of this report)

provides a comprehensive analysis of the present state of functionality and logistical capacity

of the Bulgarian e-justice system. According to the report, at the time of the accession to the

EU, rules were put in place to require courts to publish court decisions online. The

implementation of this requirement took some time to ensure in all instances, but is general

practice today. In recent years electronic case management systems have been introduced

4 BULGARIA: Technical Report, Accompanying the document, REPORT FROM THE COMMISSION TO

THE EUROPEAN PARLIAMENT AND, THE COUNCIL on Progress in Bulgaria under the Cooperation and

Verification Mechanism, Brussels, 25.1.2017SWD(2017) 24 final (https://ec.europa.eu/info/sites/info/files/swd-

2017-24_en.pdf)

8


in most courts, in some cases also allowing for external communication. A unified electronic

system for the management of criminal cases has already been implemented within the

prosecution in 2014 but has yet to be extended to the courts. Communication between

prosecutor's offices and police is problematic due to the lack of a common IT system, which

may be a cause of delays in pre-trial proceedings. Plans have been made regarding the

challenges related to the introduction of electronic tools in the Bulgarian judiciary over the

coming years in the context of a broader government e-justice strategy.

The allocation of court cases amongst judges within competent courts is an area where

Bulgaria has for many years had electronic systems in place. According to the law (Judicial

Authority Act), the decision on which judge should be charged with a particular case must be

based on the principle of random allocation. The system of random allocation of cases has

been adopted as a mechanism for the prevention of undue influence and corruption in the

courts. In addition to these methods of protection the use of an automatic, electronic system is

supposed to remove any possible human interference in the selection of the judge for

any particular case.

In regard to the judicial enforcement, it is a fact that neither the legislative sources nor the

administrative regulations address the system of private judicial enforcement as a part of the

national e-justice system with the exception of a few marginal provisions which shall be

addressed further on. It would be a fair estimate that the mission for development and

implementation of information technology in the profession of civil enforcement lies entirely

within the initiative and material resources of the PEO Chamber and its members.

Perhaps the most authoritative and objective national assessment of the e-justice

implementation within the judicial system consists in the Strategy (Decree № 163 of Council

of Ministers of 21.03.2014).

In its pertinent parts the document (sec. VI, 6.1., 6.3., 6.4.) describes that the E-Governance

Act and implementing regulations regulate the requirement to develop an e-government

strategy in the justice sector. At present, there is no legal possibility to use the electronic

document and the electronic signature in direct activity and interaction with the bodies of the

judiciary and their administrations. There is also no legal mechanism to exercise procedural

rights in electronic form. Single provisions in procedural laws introduce limited possibilities

for keeping certain lists or ledgers in electronic form and performing certain actions via the

internet. With the entry into force of the Electronic Document and Electronic Signature Act,

electronic documents are recognized as equivalent to paper and may be signed with a simple,

advanced or qualified electronic signature which has the legal effect of a handwritten signature.

However, a wide range of legal rights related to the statutory recognition of the e-document and

e-signature by the judiciary authorities and the exercise of procedural rights via e-venues remain

unregulated outside the scope of EDES Act, hence implementation of these electronic tools is

presently latent. The current Judicial Authority Act does not stipulate tools for the judiciary to

handle cases in electronic form. There is also no possibility of transforming paper documents

and evidence into electronic ones. The law does not regulate (with few very limited exceptions)

the process service by electronic means and its transfer from an auxiliary into a primary tool

for service.

9


The Strategy analyses leads to the conclusion that to date there is not a single systematic

approach to implement IT data processing in the Bulgarian judicial system. Existing software

applications have been purchased or created over different periods of time, with the aim of

meeting then current needs of either the Justice Ministry, its subsidiaries or the respective

judicial structures. IT infrastructure that automates the substantive activities of individual units

as an integrated system is virtually absent. As a major drawback of the interactive operation of

information systems, is their development and implementation before the adoption of the

current E-government regulation. Therefore these do not meet basic requirements for

interoperability and information security. None of the information systems currently in

operation have been certified in accordance with the Regulation on the requirement for a single

environment for exchange of electronic documents, and there is no link with the Unified

Electronic Document Exchange Environment hosted by the Ministry of Transport, Information

Technology and Communications. The data exchange between the Justice Ministry and its

subsidiary units as well as with the Judicial Authority structures is primarily through paper

documents, there is not an internal electronic system for administrative service.

Servers and accompanying software for active directory, mail server and etc. have been

supplied, but the goals have not been fully achieved. Partial implementation leads to a lack of

centralized storage, management, control and policy development. Insufficient in number and

decentralized mail servers result in the use of different e-mail providers with varying quality of

service as well as security standards. The analysis shows that the state of information

technology in the different units of the Justice sector is characterized by vertical and horizontal

decentralization - each structure hosts independent IT infrastructure consisting of active and

passive communications equipment, servers and storage media and information systems. There

are no common standards and no coordination of the specialized human resource involved in

the development and maintenance of said systems.

There is a variety of reasons for the multitude of incoherent (and ultimately – inefficient) e-

governance systems in Bulgaria. In general, this is due to the historical lack of political vision

of the necessity of a unified e-governance. As already discussed, since the early nineties each

branch, service and/or department has been developing its own systems without any particular

unification concept. In more pragmatic terms – a major reason for this tendency is the absence

of unified and secure means of electronic identification. Currently there are many functional

electronic administrative services provided by the National Revenue Service, National Social

Security Agency, The Registry Agency (Including Land Registry, National Cadastre and

Commercial Register). These means of access are far from unified, though. At different

institutions and registers a variety of ID tools such as PIN, PIC, qualified electronic signature

and etc. are requested. Obtaining, maintenance and safekeeping of all related information and

devices proves complicated and resource consuming. The Electronic Identification Act in effect

since 21.11.2016, stipulates an obligation for all entities to maintain a unified means for

electronic identification, while preserving the present venues of access for a transitional period.

3. IT solutions in the organization of Private Enforcement Officers in Bulgaria

3.1. The IT infrastructure of the Bulgarian PEO consists of two major segments:

1/ registers and data management of the Chamber;

10


2/ case management systems of the individual PEO and/or PEO partnerships.

These two segments do not interact systematically and by default, regardless of the fact that

they are partially integrated as a flow of data. For instance, registered debtors and auctioned

properties for the purposes respectively of the Central Debtors Register and the Public Sales

Register are transferred automatically from the PEO case database to the Chamber’s registry

database. Both these segments of the PEOs IT infrastructure are basically independent from all

national automated registers (population, land, vehicles, intellectual property and etc.) as well

as from the registers and databases of the national judicial system as a whole. The Chamber

through its Board (Council) and Chairman is competent to resolve all matters related to the first

segment. Should a major cost is to be incurred, it has to be planned and voted for through the

annual budget mechanism. Traditionally (as much as in terms of regulation) the Chamber does

not interfere with the second segment. Internal statutory measures have been taken in times

when the functionality of the central registers of the Chamber have depended on certain

functionalities of the PEOs’ individual case management systems, i.e. those were ruled into

compliance with the respective Chamber registers. The development of the PEO’s individual

management systems is not regulated neither by the Chamber, nor by any government authority.

The compliancy test here is rather the “empirical” outcome of the evolution of these IT systems.

Should automated registers, debt calculators, statutory updates and etc. prove to be incorrect or

incoherent on one level or another with laws and regulations, that would lead to liability both

on disciplinary and civil grounds. On the other hand, no respectable PEO’s office can afford to

incur the default on one’s image and authority by any such failure and remain unhurt by the

competition.

Before elaborating on the PEOs’ infrastructure and its correlation to national integrated

databases, it would be beneficial to present a retrospective review of both the legislative and

implemental timeline related to the introduction of the PEO’s profession in Bulgaria and the

related IT developments.

The initial concept while setting the foundation of the profession in 2005 under the auspices

of USAID and EU experts, was one unified information system for all PEO (under the Cyrillic

designation “ИССИ”). Article 77a of Private Enforcement Officers Act still provides for such,

notwithstanding the fact that presently it is virtually non-existent. Such system was developed

in 2006 predominantly with USAID funds with the intent to be hosted by the Ministry of Justice

from 2007 onward. The purpose of the system was to provide for automated functioning of all

procedural implication (title and parties, document templates and process service, attachment

(arrest) and asset processing, debt calculation and accounting, cash flow processing & etc.) on

a national scale, as well as to provide reliable statistical data and facilitate access and control

over the civil enforcement operations. Lacking long term vision as well as administrative

capacity at the inception of the reform, both the Justice Ministry and the Chamber failed to

recognize ИССИ as a priority. Lack of funding for development and maintenance of the system

made it unpractical as soon as dynamic new legislation was introduced and the system did not

follow with the updates. Presently, just two PEOs use the ИССИ system with limited

efficiency. Currently, as already mentioned, the development of a centralized IT system for the

judicial enforcement is not among the plans and the priorities of the state.

4. E-justice activities, Registers and data management of the Chamber

11


E-justice implementation in the enforcement procedure is a major priority for the Chamber.

The Chamber has funded and accomplished by own initiative several major IT projects such as

The Central Debtors Register, The Public Auctions Register, Filing and Data Processing

System.

4. 1. The Central Debtors Register

The Central Debtors Register is an automated database developed and hosted by the

Chamber which contains information of all active cases processed by private enforcement

officers. A note of reference whether an entity or person is a debtor in an enforcement case

could be obtained from the register via request through each PEO’s office in Bulgaria. The

reference is based on an instant automated check in a database deriving data from all PEOs’

offices nationwide. For comparison, if an entity wishes to obtain a certificate whether it has an

enforcement case against oneself in the State Enforcement Service, it has to file a request on

paper with each one of the 113 State Judicial Enforcement Services within the system of the

district courts. For confidentiality concerns only a physical person per se or via an authorized

attorney may obtain a reference for oneself from the PEO’s database. When it comes to

companies, however, anyone could request a reference. Through the years since its inception,

the system has become a valuable source of information whether a person is a credible partner

for obtaining a credit from a bank or for other contractual purposes. All major IT systems in

PEOs’ offices are designed for an automated exchange of data with the register. The few offices

which do not use an automated system are obliged to log online and enter the necessary case

information manually.

The Central Debtors Register is in constant use on daily basis by consumers - private

enforcement officers, companies, individuals, and corporate clients (predominantly banks, non-

banking financial institutions, insurance and leasing companies). Beginning 2014, corporate

customers are able to receive information about the presence or absence of pending enforcement

cases through remote electronic access. Subscription to this service is available upon request,

accompanied by a certificate for registration as an administrator of personal data. It is subject

to approval by the Chamber and an agreement thereof. The price of the service depends on the

number of references per month. For the last three years the number of references has increased

significantly compared to the first three years since the establishment of the Register. In 2016,

a total of 22,510 references were issued, of which 17,715 requested by (small size) companies

and citizens and 4,795 from corporate clients. For comparison - in 2015 were issued 21,184

references, in 2014 – 29,126 references.

4.2. The Public Auctions Register

The Register of Public Auctions is an enterprise which is unique for a Bulgarian public

institution. Due to the accurate and transparent display of auctioned debtors’ properties and

assets, with a multitude of find and search functionalities, the Register has boosted public

interest in auctioned properties, which has been an important contribution to the efficiency of

the civil enforcement. It also has elevated the image of the Chamber as an open and transparent

institution, targeting the optimal balance of both creditors’ and debtors’ interest. The Register

is globally accessible online and provides sufficient data to form an informed opinion in regard

to a property under auction. The Register provides visual images of the property, as well as

complete cadastral description, parties in the case, legal encumbrances and etc.

12


The amendment to Art. 487, para. 2 of the CPC of 2013 introduced the requirement for the

public sale notice to be published on the website of the District Court with respective territorial

jurisdiction. This must be done at least one day before the day of commencement of the sale.

The site provides information about public sales, conducted by both SEOs and PEOs. The

Register of Public Auctions allows for a wider disclosure of the future auction to potential

buyers and consequently the opportunity for more efficient sales of auctioned property. The

Public sales register enables a higher degree of transparency, providing search options by

different criteria. The serious differences in the ways of disclosure of auctions between the PEO

and SEOs puts the debtors in SEOs enforcement cases in a disadvantage. The auction

information on the court’s website is harder to access, accordingly the probability of a contested

bid achieving higher price is lower, the lack of transparency provides for a higher risk of abuse

of the auction process.

Unfortunately the public auctions of debtor’s property in Bulgaria are carried out in an “old

fashioned manner”. It is an auction held on the premises of the district court in the presence of

the registered bidders, under the conduct of the PEO (assistant PEO). This provides a certain

hindrance for a larger number of potential buyers to partake in the auction via distant IT venues.

The PEO’s Chamber has had initiated attempts to introduce an electronic auction initiative, the

implementation of which understandably demanded substantial legislative backing-up. At

present, e-auctions as well as other e-justice initiatives of the Chamber do not attract substantive

support from the politicians and representatives of the national legislature*. (For clarification,

please see “Final Notice and Disclaimer” at the end of the report)

The site has become a major source of information for real estate investors, agents and the

general population. In 2016, the website of the Register has been visited by 828 932 unique IP

addresses. At least twice as many unique visitors have logged into the site, given the fact, that

many computers are used by more than one person, and that some IPs, such as corporate

establishments, have numerous users, behind them. This is a 0.09 % decrease, compared to

2015 when the number was 829 646. It is most likely that the decrease observed is due to the

fact that the public sales in 2016 were less than in 2015, based on decreasing number of cases

processing real estate and vehicles. In 2016 50,818 property sales announcements were

published in the Register (compared to 52,949 in 2015). From these 45 646 were auctioned real

estates (compared to 47,161 in 2015); the auctioned vehicles were 1 751 (compared to 1959 in

2015) and other movables - 3 421 announcements (compared to 3 829 in 2015)5. In 2016, the

website of the Register was visited 3,503,866 times and a total of over 42,859,580 pages were

examined. The average number of pages reviewed per visitor was 12 on each visit, with visitors

spending an average of 8 minutes per visit. On average, the site was visited by approximately

2 271 visitors daily in 2016, the number in 2015 being 2273.

4.3. Filing and Data Processing System of the Chamber

5 According to art. 474, sec.5 CPC items with value exceeding BGN 5000 (€ 2500), motor vehicles, ships and

aircrafts, are subject to a sale under the rules for public sale of a real estate. There is a 30-day notification period

by placing a formal notice, followed by public auction at the premises of the district court. Items of a lesser value

may be auctioned on site a week (up to three weeks) after the date of the inventory. Sales in stores or specialized

markets are also admissible by law.

13


The year of 2016 marked yet another important step in the Chamber’s quest for management

efficiency through implication of IT instruments by accomplishing an automated filing and data

processing system. The system encompasses an electronic database of the entire archive of the

Chamber since 2006, including but not limited to PEO status and registration, documentation

related to the administration of the Chamber, data related to disciplinary proceedings as well as

to internal monitoring. The system has a criteria search and filtering functionalities allowing

access to scanned archives, internal administrative acts and procedural records. Through

module "Disciplinary and Judicial Practice" an operator could extract and process electronic

copies of disciplinary cases and files. Decrees of the Disciplinary Committee, rulings and

judgments of district courts as well as the Supreme Court could be accessed and filtered by

different criteria, such as: parties, type of disciplinary sanctions, nature of the violation (ethical,

disciplinary or infringement of good practice criteria and etc.). Through the available

electronic database information on complaints, disciplinary proceedings, claims for

damages, professional insurance and etc. information for each PEO, subject to a procedure or

an administrative operation, could be extracted quickly and systematically. For instance, the

Chamber could notify automatically a PEO on a failure to renew one’s professional insurance

or to file one’s mandatory annual report.

Since the beginning of 2016, the Chamber has activated a centralized information system for

processing the annual statistical reports of the PEO. The reports are due by statute and provide

valuable information for the number of cases opened, closed and active as well as of amounts

of funds, due and monies collected. The system’s functionality allows for references in regard

to the source and the nature of the debt as well as to the case parties, regardless of these being

physical persons or entities, and the latter respectively being commercial, cooperatives, non-

profit organizations, etc.

4.4. Case management systems of the individual PEO and/or PEO partnerships

Regardless of the state institutions failure to provide for a unified judgment enforcement

information system, the operations of the PEOs in Bulgaria are sufficiently automated in all

aspects of the enforcement procedure. There are about 3 major software systems, developed

by specialized IT companies (“Enforcer”/ https://enforcer.bg/enforcer/; “Jes”; “Executor”

http://www.executor.bg/) for enforcement case management as well as several others,

sponsored and developed by individual PEO’s offices. Few PEO’s offices still perform their

clerical operations using paper registers and ledgers. The availability of IT case management in

civil enforcement is not compulsory by law, but is rather a managerial and marketing necessity

imposed by a dynamic legal environment.

In general terms POE’s case management systems perform automated creation, update and

synchronization of documents and registers such as:

- Correspondence ledger (Input/Output); operations log; case register

- Minutes, records of procedural activities, statutory notices, decrees,

- Maintenance and update of a case Index

- Integrated shared e-doc folder

In effect the information carried by a certain document (e.g. a writ of execution or a notice

for enforcement) once registered in the system is processed, filtered and distributed through the

14


respective registers to provide synthesized data for a multitude of operational purposes such as

following deadlines, planning and reporting, scheduling of operations, and etc.

The cash flow management implications (with slight variation among different systems)

include Integration with Internet Banking, debt calculation and clearing, offset of interest and

costs, transfer of collected funds and/or disbursement. Operational functions include but are

not limited to automated data summary for statutory reporting, work/tasks calendars, “time

machine”(case history for auditing purposes), automated synchronization with the debtors'

register. All systems have integrated functionalities for financial accounting, i.e. each

procedural operation related to a fee is accounted for by the issuance of an accounts under Art.

79 Private Enforcement Officers Act and an invoice under the Accounting Act. In the most

advanced versions the systems maintain the “electronic case” functionality – a complete

scanned version of the paper file allowing for dynamic management via a bar code recognition

– for instance when a notice is served, by scanning the bar code, the system would designate

the document as “served” in the respective automated log and mark the deadlines in the

respective ledgers, calendars and schedules. Serving the same purpose the systems are

generally similar in functionality, the “Enforcer” being one of the most advance amongst them.

The system is WEB based Server - Client type and is accessed through a private IP address,

which is located in the office of the PEO. The system interacts with the Chamber’s Debtor's

Registry via an encrypted HTTP connection and through an API program supported by the

Chamber. Remote users access a server, which is maintained by the provider as the systems of

respective PEO users synchronize the necessary information through provider’s internal

programming interface. Through provider’s internal program interface (API) through HTTPS,

the provider updates PEO’s entire program with new features or performs troubleshooting.

Although the IT systems provide for predominantly automated operations in each PEO’s

office in terms of case and financial management, process service, document processing, remote

access to case data and etc., that does not change the general fact that the justice process in

Bulgaria (both civil and criminal) and judicial enforcement as an integral part of it, is

materialized and processed via paper files. All and any electronic data related to a judgment

enforcement case are just an image reflection of the paper original which is considered solely

authentic and relevant in case a dispute is raised whether a certain claim, objection, ruling or

other relevant legal action has occurred or is existent as an occurrence of fact or a matter of law.

A practical illustration of the latter is the following: in case of judicial control is to be exercised

over the legitimacy of one a PEO’s actions, the competent court is to demand a paper copy of

the case file for judicial review. Control exercised by the MJ Inspectorate is performed under

the same condition. Due to present arrangements, it is not unusual for hundreds of case files

copies, consisting of hundreds, sometimes - thousands of pages, to be transferred through

controlling institutions on a daily basis.

On the “flip side of the coin” it has to be admitted that the court system (whose judgments

are subject of execution by the PEOs) does not have a single integrated information system. At

present there are several systems for case management in the Bulgarian courts, each with its

own mechanism of data protection and control which is a practical hurdle on the way of their

integration.

It is widely accepted within the legal circles that a unified integrated platform of the judicial

enforcement would be highly beneficial and there are indeed a multitude of arguments to that

end. A single system would streamline the data processing which at present (being subject to

15


a variety of technical approaches and efficiency criteria) contributes to some controversy as to

the authenticity of the outcome result, which is mostly focused on the calculation and

disbursement of an aggregated debts against multiple and often irregular partial payments (e.g.

alimony, child support, etc.). A unified system would also be much more suitable for

integration (in terms of on-line access and data exchange) with the various data platforms of

state and municipal agencies hosting public registers.

On the opposing side is the argument that at present the IT systems in operation in PEO’s

offices compete among themselves which brings not only to adequate compliance with any

legislative change, but also to a rapid development of new functionalities resulting in higher

efficiency of the process and cost reduction in the long run.

In larger perspective, the introduction of e-justice management in the area of judicial

enforcement is generally accepted as a must in terms of modernization and technological

adequacy by all branches of the legal profession. Paradoxically, however, the Strategy for the

Introduction of E-government and E-Justice in the Justice Sector 2014-2020 (hereinafter

referred to as the Strategy) does not bring any clarity what the involvement of the State if any

at all would be. The only part of the Strategy that relates to the judgment enforcement, refers to

“Information system of the judgment enforcement”, envisaging to "accept applications, notices

and appeals concerning the operations of judicial officers, both state and private, as well as such

of the land registry judges, notaries and bankruptcy trustees." If the planned IT system for the

judicial enforcement is limited to the functionality described by the Strategy, which would mean

that the Bulgarian state does not plan to provide IT automation of the judicial enforcement

system of equal or similar scale to the automation envisaged for the processing of court cases.

The functionalities listed in the strategy in regard to the system of judicial enforcement would

not include enforcement case processing on an electronic platform via means of software

management, as well as remote access of parties and their legal proxies to such cases. Neither

would such system allow remote access and review by authorized parties for purpose of

monitoring, control and disciplinary review.

An unfortunate example for the lack of initiative and active involvement on behalf of the

state besides the failed ИССИ system is the currently dormant stipulation of art. 450 of CCP6.

6 Art. 450a. (New, SG No. 49/2012, effective 1.01.2013) (1) Attachment on debtor's entitlement on funds in a bank

account may be imposed by a bailiff by means of an attachment in electronic form, signed with Qualified electronic

signature electronically sent through a Unified Electronic Attachment Exchange Platform. Attachment on other

entitlements of the debtor in a bank is carried out in the general order.

(2) The bailiff and the banks may be listed on or excluded from the Unified Electronic Attachment Exchange

Platform by a unilateral statement to the Minister of Justice. By being listed in the Unified Platform, bailiffs and

banks undertake obligation to accept electronic statements regarding levying, enforcement and lifting of the

attachment. In case of exclusion from the Unified Platform, bailiffs and banks are required to continue accepting

electronic statements regarding the electronic attachments imposed so far.

(3) The notification message, the bank's reply, the notice of release, the confirmation of the received message and

all other statements related to the imposition, execution and release of the attachment shall be presented and

maintained in the system by a uniform standard approved by the Governor of the Bulgarian National Bank and the

Minister of Justice.

(4) The requirements for the Unified Platform for Exchange of Electronic Attachments shall be approved by the

Governor of the Bulgarian National Bank and the Minister of Justice.

(5) The electronic statements are deemed received by the addressee by their downloading from the Unified

Electronic Attachment Exchange Platform.

16


Despite the stipulation, which has been in force for over four years, attachments on debtor’s

bank accounts are levied through a paper document (attachment notice), which is usually filed

with the respective banking institution via mail or by a process server. In spite of the common

notion that such methodology is both expensive and time consuming, considering the fact that

all technological logistics and infrastructure related to the Unified Electronic Attachment

Exchange Platform have been accomplished and ready for operation, it is hardly

comprehensible that the rule is not applied for the lack of a ministerial ordinance regulating the

technical steps and competences for implementing the process.

It is apparent that presently the state has not formed neither vision, nor plan to subject the

enforcement procedure both for SEO and PEO to mandatory electronic processing. Neither has

it planned to provide the necessary technical infrastructure for the purpose. That leaves the

initiative for such substantial undertaking in the province of the Chamber. Although the PEO’s

guild organization holds both the capacity and the means to develop such system, in order to

achieve an optimal efficiency of such project, it would need certain statutory backing in terms

of regulation and delegated state authority. Such is needed, based on the very nature of the

public function of private judgment enforcement. In case of an electronic document (or case

file), produced by the PEO’s IT system is not granted proper authority by the state via statutory

instruments, the effect of such document could be ascribed as “limited” at best.

5. Monitoring and control

5.1. Monitoring and control over the activities of the Private Enforcement Officers

The profession of Private Enforcement Officers in Bulgaria is strictly regulated by statute.

It is monitored and controlled by the guild organization, the Chamber of PEO, as well as by the

state through the Inspectorate of the Ministry of Justice. The IT implications of such control

are not direct, but rather auxiliary. Both the Chamber and the Inspectorate are performing

planned as well as incidental (upon complaint) audits of the PEO offices. Those could be

performed by documental review (a PEO is requested to present a copy of one or several case

files) or by checks and interviews on site, at the office of the respective PEO. Both methods do

not involve any electronic access to data or transfer of electronic documents. Even scanned

case files via e-mail are frowned upon by the MJ inspectorate for reasons primarily related to

lack of regulations in that regard. Each audit is finalized with a report, filed on paper, which

either states that PEO operations are compliant with the applicable law, or describes all noted

violations of statute and/or ethics. An adverse audit report may lead to formal recommendations

or to disciplinary action depending on the gravity of the violations.

5.2. Monitoring and control by the Chamber of PEO

The Chamber monitors and controls both adherence to laws and procedures as well as

compliance with rules for funds management, financial and accounting regulations. The major

function of the monitoring process exercised by the Chamber is early assessment and prevention

(6) When the statement is presented by a different standard, mandatory requisites are missing or the sender cannot

be identified, the addressee shall return a message that the receipt is not confirmed and state the reasons thereof.

(7) The bailiff shall make a note of the action taken in the form of an electronic document in the case file, indicating

its location in the Unified Electronic Exchange Platform.

17


of professional misconduct and wrongful procedural approaches. In practical terms, the

Chamber performs 2 complete monitoring audits annually, i.e. each one of the 202 (based on

the 2016 annual report of the Chamber) PEO is checked every year. The scope of the

monitoring includes all pertinent procedural, financial and clerical/bookkeeping aspects of the

day-to-day business. Normally the results of any such audits shall be noted in a report focusing

on of recommendations for optimization of certain procedures or avoidance of certain practices.

On occasion, a request for disciplinary proceedings would be filed. For the entire period from

2006 until the end of 2016, there have been initiated and processed 297 disciplinary cases. For

the duration of the said period the Disciplinary Committee has imposed disciplinary sanctions

as follows: 17 reprimands, 139 fines in various amounts up to €5000, 9 warnings for temporary

revocation of license to practice and 16 revocation of license to practice. Considering this

statistics, one has to bear in mind that any sanction is subject to appeal before the Supreme

Court of Cassation, which may confirm, repeal or reduce the sanction7.

5.3. Monitoring and control by the Ministry of Justice (MJ)

The prerogatives of the MJ for exercising control over PEO-s through a body of inspectors

is stipulated by art. 75 and 76 of PEOA. An inspection is assigned by a ministerial order. The

audits are either planned in accordance to the annual schedule approved by the Minister, or

random ones following risk assessments or prompted by complaints or by a proposal of the

Chamber Council. The scope of the audit may vary. It may be an audit of the entire PEO’s

business operation, or may target a particular area, such as certain procedural acts, accounting

practices or a review of one or more file cases. An inspector has the right to free access to the

office and to the official archive of the private enforcement officer and is also entitled to obtain

copies of documents upon request. The inspector also has right of access to the fiduciary bank

accounts under Art. 24.1. PEOA. Inspector’s prerogatives would usually be limited within the

frames of the ministerial order or the proposal for the audit. Depending on the gravity of an

eventual misconduct or statutory violations, the inspector either may move for formal

recommendations by the Minister for the PEO to abide by, or alternatively may file a report

requesting initiation of disciplinary proceedings.

An important and relatively new regulation (enacted in 2015 г.), is Regulation № Н-1 of

February 20, 2015 г. for the rules of the financial audit of PEOs. Despite the fact that since

2007 art. 75а PEOA provides for prerogatives of a specialized body of financial inspectors

within the MJ to monitor exact and correct estimation and accrual of fees (presenting the cost

of execution), correct funds management and reporting, the 2015 regulation provided much

needed details for that particular financial control. The intricacy of the matter in part proved to

originate from a certain dual capacity of the PEO. On the one hand, the PEO administers the

procedure of executing civil titles against the property and other assets of the debtor, which in

essence a state enforcement officer also does. On the other hand, a PEO personally administers

multifaceted and complex financial flows parts of which represent proceeds from debtor’s

assets, fees and VAT deductions therewith. Other part of the administered monies is PEO’s

own income derived both from advanced fees or fees from proceeds of the execution process

and the related income tax, VAT and social security deductions. To make matters even more

7 Detailed information and statistical data may be found at: http://www.bcpea.org/english/articles.php

18


complicated, in contrast to a state EO (who is a state employee) a PEO sometimes is an

employer of a significant number of employees, which inevitably brings the problem of

administering their income as well as all related taxes and social dues at the source. Such

complexity of the financial, taxation and social security implications of the profession were not

accounted for entirely in the legislation, much less provided for automated processing via IT

means. In practice each PEO’s office choses the accounting management software which is

usually integrated as a module in the aforementioned IT management systems. A general

standard for complicity is that the final product of those accounting modules abides by the

national accounting and taxation legislation. Although in practice an auditing official would

draw the necessary reference from a PEO’s automated database, they would always compare

the data with the paper source (accounts, invoices, electronic banking printouts), which is

considered the authentic evidence for the operation under scrutiny. IT solutions in the process

of control such as remote access to PEO’s database or virtual exchange of relevant documents

or data are practically non-existent.

6. Organization of disciplinary proceedings

Disciplinary proceedings against PEOs in Bulgaria are conducted by the Disciplinary

Committee of the Chamber which consists of at least eight members. The mandate of the

Disciplinary Committee (hereinafter “DC”) is three years. The Minister of Justice appoints half

of the members of the Disciplinary Committee. In practical terms, MJ’s representatives are the

inspectors of the inspectorate. As for the members of the Chamber of PEO, a DC membership

requires at least 5 years of juridical practice or service. A member cannot serve more than two

consecutive terms.

According to art.67 PEOA, a PEO shall bear disciplinary liability for culpable non-fulfilment

of his responsibilities under the statute and the By-laws of the Chamber. The Bulgarian

legislator has not accepted an approach where a definite number of wrongful actions and/or

non-performances of due actions shall constitute disciplinary violation. Although a

Disciplinary Code has been contemplated through the years, there are still a variety of

controversial opinions amongst representatives of the legal profession and the academia

whether codification is the right approach to optimize the element of fairness and justice in the

disciplinary context. At present, the general principle of an effective disciplinary procedure is

for the initiating party (being either an MJ inspector or BCPEO controller) to formulate one or

more formal breaches of statute and present enough evidence to the disciplinary panel for the

latter to impose a punitive writ. On the contrary, should the panel consider that there is not

sufficient evidence of infringement of the law, the disciplinary panel would formally refuse to

impose a sanction. Art. 68.1. PEOA provides for the following disciplinary sanctions:

reprimand; fine from 100 to 10,000 BGN (50 € to 5,000 €); warning for temporary revocation

of license to practice; revocation of license to practice from 1 to 5 years. The law (art.69 POEA)

provides for a statute of limitation on the disciplinary liability which is 6 months as of the

discovery of the violation, but no more than two years after it has been committed. The

disciplinary violation is considered discovered as of the moment the body under art. 70, para.

1, has been made familiar with the violation. In practical terms, those deadlines proved to be

too short where a good defence based on technicalities was performed on behalf of the accused

officer. Thus in the early years of development of the profession, a number of substantial

disciplinary cases failed for either the expiration of the 6 months or the 2 yrs. period. The

19


reason for that was that a penalty imposed by the DC does not come into force until the appeal

procedure before the Supreme Court is completed. Often due to a substantial case load, a case

resolution before the Supreme Court took more than two years. Only recently the Supreme

Court of the Republic announced a binding decision (№2/2013) that the 2 yrs. deadline applies

and is current up to the moment of the case referral to the sanctioning body.

In practical terms, disciplinary proceedings are initiated at the request of the MJ or by a

decision of the Chamber Council. Along with the request (or later) a temporary ban to practice

may be asked and respectively granted by the discretion of the Committee. The PEO may file

an answer to the accusations within a 7-day period of the notification. For the actual

disciplinary hearing a panel consisting of two members of the DC and one of the MJ quota is

appointed by the Chairperson of the DC. At the hearing the accused PEO may be represented

by a legal counsel. The decision for the temporary ban to practice is subject to appeal before

the Supreme Court of Cassation within a 7-day term from the notification. In the disciplinary

proceedings all material and/or documentary evidenced as well as witness testimonies are

reviewed, heard in open session and considered by the panel. As general principle, where

explicit procedural rules are not provided by the PEO Act and the pertinent regulations, the

rules of the Civil Procedural Code are applied. By default, it is a classic litigator process, where

no means of IT or automated evidentiary (or process service) exchange is involved. The

decision of the disciplinary panel may be appealed before the Supreme Court of Cassation on

grounds of nullity or inadmissibility, violations of the law, material violations of the procedural

provisions and a clear injustice of the imposed disciplinary sanction. Entitled to an appeal are

the sanctioned PEOs and the Minister of Justice (even in cases where disciplinary proceedings

are initiated by the Chamber Council). The Supreme Court of Cassation considers the appellate

complaint upon its merits by a panel of three judges. The court may declare the nullity of the

decision, annul and suspend the disciplinary proceedings, leave the decision in force or repeal

the decision and change the imposed sanction. The decision of the Supreme Court of Cassation

is final.

In the context of IT management of the process it should be noted that although the nature

of the procedure before the disciplinary panel and the court is not yet supported by any

automated means, the entire clerical process related to the monitoring and disciplinary process

within the Chamber is digitalized and automated by the data management system. Data and

scanned files related to both active and closed disciplinary proceedings could be accessed and

filtered for relevant information via the "Disciplinary and Judicial Practice" module. At the

same time the process of deliberation and consideration of a disciplinary case could be

facilitated by extracting relevant case law using a variety of filtering criteria.

Chapter II: Legislation and procedures on enforcement

1. Legal environment related to enforcement

The subject of the present section and certain specific topics of the Report further on have

been substantially influenced by a very recent legislation8, which although finally voted in

parliament has not been officially promulgated at the moment of drafting the Report.

8 Law amending and supplementing the Civil Procedure Code adopted by the 44th National Assembly on 18

October 2017.

20


Regardless of any vocatio legis these amendments shall become a valid statute in Bulgaria

sooner rather than later. The feasible and pragmatic approach of updating the Report would be

to mark the new amendments where applicable and appropriate alongside with the current

stipulations of the same subject matter. There are two reasons for that. Firstly, most of the new

rules rather enrich the existing arrangements, than outright repeal them. For instance an

electronic auction is introduced, but the auction conducted in court (see sections 5.2., 5.3., pg.

28 infra) in the presence of the bidders has not been repealed as a method of selling debtor’s

property. Another example is that service of extrajudicial documents by PEOs has been

introduced, but that did not affect PEO’s present prerogatives to serve procedural papers. A

typical “short-sightedness” of the Bulgarian legislator is demonstrated yet again – no statutory

(or administrative) arrangements have been made for the amendment to relate to the subject

matter regulated under Regulation (EC) No 1393/2007 (see sections 2.1., 2.2., 2.3. on pg.22-24

infra). There is yet another basic reason for present expert to preserve the structure and contents

of the Report. There are number of precedents in Bulgaria, some of which mentioned in the

report (electronic arrest of bank accounts, electronic filings and documents as valid evidence in

court and etc.), where innovative initiatives in the field of e-justice have been existing on paper,

but being dormant in reality for an extensive period time.

The procedural base for civil enforcement in Bulgaria is structured by stipulations in several

fundamental pieces of legislation the major of which, in terms of employment of enforcement

officer’s prerogatives is the Code of Civil Procedure (CCP)9, which sets the basic principles

both for functional jurisdiction (territorial and per measure of interest) as well as in regard to

titles, legal grounds and enforcement instruments. Titles enforceable under the CCP are based

on civil claims.

PEOs in Bulgaria also hold prerogatives to enforce public dues based on Art. 2, para. 2 and

3 of the Private Enforcement Officers Act in connection with art. 163, para. 3 of the Code of

Tax Revenue and Social Security Procedure Act (hereinafter “Tax Procedure Code”).

Systematically the receivables to be collected by PEO are set by art. 162, para. 2 and 3 of the

Tax Procedure Code as taxes, excise duties, customs duties, state and municipal taxes and fees,

administrative fines, the claims of the European Union budget on decisions of the European

Commission, the Council of the European Union, the European Communities, the European

Central Bank and others. The authorities empowered to entrust the recovery of public debts are

the authorities which have the power to establish such claims. Regarding local taxes and fees,

the competence of the authorities and the relevant procedure is regulated in Art. 4 of the Local

Taxes and Fees Act, as in para. 2 of the cited legal provision, it is expressly stipulated that the

compulsory collection shall be carried out by bailiffs under the procedure of the Civil Procedure

Code. With few exceptions under the procedure of the Tax Procedure Code PEO hold the

prerogatives identical of those of a public enforcement officer, the latter per se being an

employee of the National Revenue Agency.

9 CIVIL PROCEDURE CODE (SGNo. 59 of 20 July 2007, in force since 01.03.2008 last am. SG. No. 63 of 4

August 2017)

21


PEOs have competence of performing the duties of their office under several other laws,

such as the Code of Administrative Procedure and the Special Pledges Act, but their practical

involvement in a measure of a case load under these statutes is relatively insignificant.

Bulgarian legislation follows a general principle, set out in the Obligations and Contracts

Act (in force 1950, last amendment 2008): “the entire property of a debtor presents a universal

collateral for the creditors, the latter having equal rights to obtain satisfaction of the debt, absent

any statutory privileges.” According to well established case law and legal tradition this

stipulation is interpreted in vein that the creditor (who in the Bulgarian doctrine is dubbed

“master of the enforcement process”10) may direct enforcement against any of debtor’s assets,

funds, movables, real estate and etc. That prerogative derives legal authority from the

assumption that the creditor is a holder of a legally sanctioned execution title and the debtor is

in default of the general principle that debts must be satisfied in due course. That prerogative

is not unlimited. There is a statutory list of debtor’s assets (movable, sustenance, clothing etc.)

that are excluded from enforcement. Same is relevant for debtor’s sole residence11. Debtor

also holds the defensive prerogative to offer to the enforcement officer alternative objects to

enforce against and the latter is obliged to make a formal and motivated judgment whether or

not the suggested collateral is equally sufficient to serve creditor’s legitimate interest under the

title (art. 443 CCP). Proportionality of execution is not established in the law. It is rather an

ethical principle of the PEO’s profession in Bulgaria. There is a variety of reasons for that,

however in essence those could be limited to at least 3 basic practical issues:

1.1. Partly due to “tradition” as well as to basic instinct to avoid and deceive ones creditors,

many debtors live on funds or use property formally held in the name of other persons, thus

attaching any property formally in the debtor’s name proves to be an efficient instrument to

“bring” the debtor to the “table of negotiations”, where he/she would provide the funds to satisfy

the debt, which are factually his/hers, but formally are in someone else’s name.” Bulgarian

PEOs (unlike the bailiff of the Russian Federation for instance) do not have any prerogative to

“investigate” whether in terms of law a property used by the debtor is actually the debtor’s

property or not. The PEO may arrest only property that is formally registered in the name of

the debtor (real estate, motor vehicles, sea vessels and etc.) or in regard of movables – any item

found in the factual possession of the debtor. If a third person claims ownership, he/she may

prove that in a court of law.

1.2. Bulgarian legislation imposes an obligation on the enforcement officer to inform the

National Revenue Agency (i.e. the state taxation authority) after any case initiation as well as

before the disbursement of any payments (made either by debtor or a third persons who had

been notified of the enforcement i.e. their dues to debtor being directed to the PEO via an arrest

of debtor’s receivables) as well as of monetary proceeds from auctioning the debtor’s property.

10 Creditor (claimant) in Bulgaria holds strong prerogatives to stop, terminate, as well as to renew or initiate again

the enforcement. He/she also may determine the enforcement measure and the officer is bound by such request

unless officer considers it against the law. Creditor (claimant) holds the legitimate prerogative to appeal any

refusal of PEO to abide by ones requests for enforcement. Should the court reverse the refusal, PEO is obliged to

comply with the court’s decision.

11 Unless another member of debtor's immediate family does not own another residential property.

22


The same rule favours the creditors with a registered collateral (such as mortgage, lien or a

special pledge) on debtors property, i.e. EO must notify them once enforcement measures are

directed upon said encumbered property. Accordingly EO must add any such collateralized

debt to the initial debt in the case. Thus, at a certain point of time (and in practice – quite often)

there shall be a new debt on file (“joint debt”), the source of the latter being public dues (e.g.

past due taxes, social security payments, property tax etc.) Such debt is not only a legally

sanctioned enforcement title, but also a privileged one that must be satisfied by PEOs before

the basic debt per initial title, unless that debt is not secured by a higher statutory privilege. For

example, if a debt is securitized by a mortgage on a property, when the property is auctioned

and sold, part of the proceeds that equal the securitized debt shall be paid to the mortgage

creditor and the remaining part, if any – to the Revenue Service. The latter, of course, shall

happen if the debtor still has past due public obligations. If there is no mortgage security on

the initial debt, the public debt would have priority under the same factual situation. Same

principle of scale of privilege is valid in many EU countries as well as other jurisdictions.

1.3. At any point of the enforcement procedure in any particular enforcement case other

creditors of the same debtors may join in the process. This is another hypothesis of joint debt.

The difference with par.1.2 supra is that the PEO does not have the statutory obligation to look

for creditors whose receivables have no registered collateral in a public register and respectively

notify them. Recently the case law12 established yet another obligation for the Bulgarian

enforcement officer to notify and adjoin to the case all the creditors of same debtor who have

been previously recorded (entered) arrest on a certain property, upon which the PEO directs

enforcement.

The above described complications of an enforcement procedure in view of the significant

interindebtedness in the Bulgarian economy present a huge challenge to the functionality both

of the automated management systems of PEO’s offices and their adequate interaction (where

available and possible) with any public register or database related to registration of assets,

statutory and/or contractual encumbrances or public dues.

2. Service of documents

2.1.Service of Documents by Private Enforcement Officers

PEO in Bulgaria performs process service within the frames of the enforcement procedure

conducted by the officer. PEO may also serve judicial papers by an explicit authorization of

the court on case by case basis. As a general rule, PEOs in Bulgaria are not empowered to serve

extrajudicial papers related to civil and commercial matters in an official capacity13. As it shall

be described further, technological means for service of documents in Bulgaria are very limited.

12 Bulgarian Supreme Court Interpretative Decision №2/2013 (BSC Civil and Commercial Department, June 26

26, 2015) 13 After entering into force of Law for amending and supplementing the Civil Procedure Code adopted by the 44th

National Assembly on 18 October 2017 that statement would not be entirely correct. Relevant amendments are

quoted below, although the realistic estimate of their practical implication and juridical effect shall be subject to a

continuous testing by case law and legal doctrine: §76.: in Private Enforcement Officers Act (SG No. 43/2005,

amended, SGNo.39/2006, No.31,59 and 64/2007, No.69/2008, SG No.97/2010,No.82/201, No.49/ 2012)

amendments and supplements are made: 1. Art. 18 para. 5 is amended as follows: "(5) The private enforcement

officers may serve all summons, notices and answers thereof in connection with civil relations and, upon order of

the court, communications and summons in civil matters."

23


The general principle (and considered most authoritative and reliable by the courts as a matter

of fact as well as of law) is the service in person to the addressee. The service is performed via

notices on paper. That basic rule is mandatory for the initial notice of enforcement which is

accompanied by a copy of the enforceable title. The addressee would either sign the server’s

copy upon identification or refuse to do so. Addressee’s refusal to formally acknowledge

service is then certified by a formal notice and the signature of the process server. Such service

would be considered legitimate under the law. Should the party in concern is not found at ones

registered address, service to certain category of person of a lawful age, such as family members

as well as others duly registered on the same address, employers, employees and such may

validly accept the service, noting their obligation to hand the documents over to the addressee.

Service to legal entities as well as representing attorneys is straight forward in procedural terms.

Attorneys are not allowed to reject service and legal entities are served at their registered

address according to the respective public register. In both cases if a suitable recipient of the

documents is nowhere to be found, a formal notice of the service is posted at the address and

the recipient is considered duly served after the expiration of a 14 days period designated for

the latter to visit PEO’s office and obtain the papers.

Most procedural complications arise in the case when a physical person (in most cases - the

debtor) could not be found at one‘s registered address (given that no other person would accept

an “in lieu” service) or does not have a registered address in the country at all. In accordance

to art. 47 in connection to art. 430 CCP, also in the light of the Supreme Court interpretation

(see footnote 15) when certain procedural technicalities are accomplished and it is formally

established that the debtor cannot be found, the POE upon claimant’s request, forwards an

application to the district court for appointment of a “special representative” of the debtor. The

latter, being an attorney-at-law, acts as a legal representative in absentia of the debtor for all

procedural purposes including but not limited to process service.

In terms of technological alternatives to the “in-person” process service the notification via

phone, fax or at an electronic mail address have to be mentioned. Such are stipulated by the

procedural law, but rather as secondary or “auxiliary” means of notification. Their application

is pre-conditioned upon urgency and as far as e-mail service is concerned – upon the explicit

consent of the debtor to be notified at a specific e-mail address. Such means of service are not

applicable in the case of the initial notification because the entire concept of debtor’s rights in

the Bulgarian legal doctrine is based on the debtor’s knowledge of the grounds for the

enforcement procedure and all the statutory parameters of the claim. In general terms all kinds

of notification other than an “in-person” service to debtor or a certain third party consenting to

transfer the notice, carries the potential burden of proof on behalf of the enforcement officer in

case the validity of the service is challenged. Each procedural notice contains certain requisites

prescribed by law (CCP) and regulation. The statutory elements of the procedural documents

are mandatory in all cases and for categories of judicial officers to an extent that the omission

of an element may lead to the annulment of a procedural act based on a faulty notification.

2.2.Service of documents on civil and commercial matters under the EU laws

Under the effective statutory provisions, persons interested in delivering of foreign judicial

papers in Bulgaria cannot address directly an officer or a court employee who is otherwise

competent to perform a process service under the Code of Civil Procedure. This is an

opportunity provided by the Community law and Bulgaria has not taken advantage of it yet

(unlike many other Member States). Direct service of documents pursuant to Article 15 of

Regulation (EC) No 1393/2007 is not permitted in Bulgaria. The interested party should

forward the documents via (practically) cumbersome mechanism through the respective district

24


court. With the adoption of the 2007 Code (art. 42) PEOs were indicated, together with the

employees of the court, post office, courier services and municipal authorities and/or mayors,

as competent servers of judicial papers. The receiving agency pursuant to Article 2(2) of the

Regulation is the district court in whose jurisdiction the documents are to be served. Based on

that, an interested party from another Member State may request from the court to order process

service (or extrajudicial delivery) by PEO. In author’s view there is neither logical nor

pragmatic reason, other than bureaucratic administrative and legislative inertia, for PEOs in

Bulgaria not to be designated as a receiving agency under the terms of the Regulation14.

2.3.Serving Extrajudicial Documents

The option for a service of extrajudicial documents by enforcement officers (both state and

private) is not available in Bulgaria15. Presently such service could be conducted in the form

of notarial notifications (“invitations” per art. 569, subpar. 3 CPC) by the notary publics. This

professional activity is not inherent to the procedural function of the Notary Public office in

Bulgaria who in general terms is competent to process and record transactions of real property

and any related collaterals, encumbrances, easements and etc. Practically very few notary

offices have the qualification, logistic equipment and motivation to perform such function.

Paradoxically PEOs who in Bulgaria perform process service “by trade” in the proceedings

conducted by their offices are not allowed by statute to serve extrajudicial documents, which

proves to be a source of remarkable legislative and juridical inefficiency. Process service is

inherently functionally connected with PEO’s professional activity, i.e. without efficient service

of papers in the enforcement process the enforcement officer could not exist on the professional

market. Accordingly, PEOs maintain personnel of highly skilled servers, logistically equipped

for the job at hand. The Chamber is institutionally involved with the training of such employees,

so that their specialized qualification increases with the development of the profession. PEO’s

service function is substantially automated in order to warrant efficient accountability for the

effective service. Most PEO’s case management systems are equipped with barcode and

scanning devices which follow the issuance, processing and formal designation in the database

as “served” in accordance with the applicable statute of each document. The level of precision

of the process is understandably the professional guarantee that the addressee’s legal rights of

due notification are abode by accordingly.

In terms of legislative solutions for efficient automated service of document, however,

Bulgarian civil procedural legislation and all relevant statute provide extremely limited means

for electronic service. The law (CCP art. 42 sec.4, art. 44 sec.3) provides an option for service

via e-mail, only in the case where an addressee (a party involved in a civil action) provides the

14 For a comprehensive review on the matter of service of judicial and extrajudicial documents in Bulgaria please

refer to “Legal Framework Analysis of the Civil Judgement Enforcement in Bulgaria” by A.Dachev, PEO;

K.Popov, PEO; T.Lukov, PEO and Jos Uitdehaag, Sofia, May 2011, a project of the Center for International Legal

Cooperation, suppprted by the Social Transformation Programme Central and Eastern Europe (Matra) of the

Netherlands Ministry of foreign affairs. 15 This will change after the latest CCP and PEOA amendments enter into force (please review footnote 13)

25


e-mail address by one’s own will on a case by case basis. Understandably in the case of a debtor

avoiding service by default such option is to presume the least – unreliable.

3. Access to information

3.1. A centralized approach on a national level toward data focused on indebtedness

(including both public dues and civil claims) is understandably a relatively new concept in

Bulgaria. Compared to Western Europe and the United States, where inception of credit rating

agencies with respective organized archives could be dated back to the end of the 19th and the

beginning of the 20th century, a former “soviet bloc” country (with practically absent private

property, commercial credit and entrepreneurial business ventures from 1944 to 1990) could

hardly be expected to have functional “debt focused” databases on a national scale. That is one

of the reasons for the popularity of the Debtor’s Registry of the Chamber, which is practically

a private enterprise of a guild organization not supported by the state (see pg. 10 supra). Any

existing public databases focusing on debtors as such have either administrative (including

banking administration) and/or fiscal implications. As outstanding in terms of authority among

these are:

3.2. The Central Credit Register of the Bulgarian National Bank16

The Central Credit Register contains information on the current state of a bank credit for the

last reporting period (month). Loans are presented in summary form without any indication of

which reporting agents are submitted. In practical terms the register provides information for

an entity or/and an individual who has active loans in a banking institution as well as loans in

other financial institution. The data contains details by one or more of the following criteria:

- By type of credit - bank guarantee, overdraft, etc.;

- According to days of arrears - from 0 to 30 days, from 31 to 60 days, etc.;

- By remaining term to maturity - up to one year and matured;

- On an agreed term of the loan - up to one year and over one year.

The system would also indicate delays on active and repaid loans including a past period of

five years (60 months) where the client had loans categorized as non-regular or overdue period

other than 0 to 30 days. Newly authorized loans - credits submitted after the last reporting

period (month), with the agreed amount of loans are also included in the system’s report. The

basic purpose of the register is to provide credit rating information to licensed banking

institutions for the purpose of securing responsible decision making and sound credit policies.

Information is accessible to any physical person or entity for one’s own data.

3.3. Debtors Register of the National Revenue Agency

The register is a Public Bulletin under Article 182, Paragraph 3, Item 2 in conjunction with

§ 5, Paragraph 3 of the Tax Insurance Procedure Code. The Bulletin contains 2 lists of legal

and natural persons with unpaid tax and social security obligations. In the first one are the

names, addresses and the following BULSTAT identification code of debtors, which have not

paid their tax and insurance obligations (in excess of EUR 2500) in due time, have not complied

with the statutory notice and do not own substantial assets to serve as collateral. The second

16 (http://www.bnb.bg/AboutUs/AUFAQ/CONTR_CREDIT_REGISTER_FAQ)

26


list contains data on public debtors who are in proceedings, do not have permission to defer or

reschedule the obligations or permission to make urgent payments. The second category of

debtors are in possession of assets on which the revenue administration has imposed security

measures as collateral of the public debt. The National Revenue Agency, pursuant to Article

182, para. 3 of the Tax Code, has the right to publicly disclose the names, the unified

identification (BULSTAT) codes and the addresses of public debtors, including the amount of

the debts.

Both, Central Credit Register of the Bulgarian National Bank and Debtors Register of the

National Revenue Agency, do not have direct implication in the operations of the PEO. On the

other hand, public registers containing information of debtor’s property, receivables and other

tangible or intangible assets, which could be subject to enforcement, could be divided in two

major categories for the purpose of the present national report:

3.4. Other registers

3.4.1. Registers, which could be accessed electronically and could be used for enforcement

purposes, such as:

- Commercial Register and Register of non-profit legal entities

- Register of Bank Accounts and Safe Deposit Boxes hosted by the Bulgarian National

Bank

- National Population Database

- National Revenue Agency Database

- The Registry agency

- BULSTAT Register

- The Register of Matrimonial Property Relations

- National Social Security Institute Database

These registers are described in detail in Chapter IV “Access to information” (infra).

3.4.2. Other administrative registers, which by design are created and maintained for the

purpose of administrative control, but are accessible to PEO upon written request and indicate

debtors’ property rights are:17

- Central Registry of Special Pledges

The Special Pledges Act regulates the terms and conditions under which a pledge is created

as a collateral for a debt without actual transfer of the possession of pledged property. Registry

consists of record of contracts and corresponding collaterals such as:

- Special pledges contracts on movable property, except for aircraft and ships;

- Special pledges contracts on receivables;

- Special pledges contracts on totality of receivables, machinery and equipment, of

commodities or materials, and of non-cash securities;

- Special pledges contracts on a future crop for the current or the next economic year;

- Contracts for a special pledge of a commercial enterprise;

- A pledge, under the Mortgage-backed Bonds Act;

- Sales contracts with retention of ownership until payment of the price;

17 Considering the purpose of present report as well as due to the multitude of these databases, the list is not

exhaustive.

27


- Leases;

- Distraints of property under Art. 4 of Special Pledges Act (SPA)

- Attachments of secured claim;

- Distraints imposed under the Tax Procedure Code

The register represents public record. Currently, the Register is not available online. An

opportunity to access public information has been provided by electronic application, signed

with certified electronic signature, sent to: [email protected].

- Motor vehicle automated database within the Ministry of Interior

- Firearms automated database within the Ministry of Interior

- Ship Register within the Ministry of Agriculture, Food and Forestry

- Agricultural and forestry machinery database within the Ministry of Agriculture, Food

and Forestry

- Register of civil aircraft registered in the Republic of Bulgaria within the Ministry of

Transport, Information Technology and Communications

4. Security of information and confidentiality

Judicial officers are bound by an obligation to protect the personal data revealed in the course

of execution of their duties. According to art. 16 -17 PEOA, PEO’s access to the debtor's

personal data is subject to the requirements of the enforcement process. The office records

(archives) of the judicial officer are inviolable and no one has the right to access it without the

consent of the PEO except in the cases provided for by law. The person who has access to the

official archive of the judicial officer is bound to confidentiality under the statutory conditions

applicable to judicial officers.

PEOs, on their own behalf, are administrators of personal data within the meaning of Art.3,

paragraph 2 of the Personal Data Protection Act. In order to perform duties in full capacity, a

judicial officer must apply to the Personal Data Protection Commission18 for registration as a

personal data administrator. The Commission monitors one’s compliance with confidentiality

obligations both upon complaints and by own initiative and has the prerogative to levy sanctions

for violations of the law.

PEO may process and apply information of debtor’s assets, liabilities and related

encumbrances and easements as long as such information is relevant and up-to-date. The

legitimacy of such usage is not necessarily limited within the frames of a case but rather whether

the information is utilized to satisfy legitimate title(s).

5. Enforcement procedures

As pointed out in Chapter I par. 3 (pg. 7 supra) the application of automated venues for

legally binding dematerialized exchange in terms of judicial procedure in Bulgaria are very

limited. Presently there is not applicable mechanisms for issuing and/or processing of

18 The Personal Data Protection Commission is an independent state body that protects individuals in the

processing of their personal data and in accessing such data, as well as the enforcement of the law. The Commission

is a legal entity subject to budget support. The members of the commission are elected by the Parliament on a

motion by the Council of Ministers for a term of five years.

mailto:[email protected]

28


enforceable titles or other documents of similar nature. An enforcement case is initiated by a

paper filing in the form of an application by the creditor, accompanied by the enforceable title

and other relevant documents attesting to the capacity of the initiating entity, its representatives

and legal proxies, as well as to the debtor’s status. The enforcement officer in Bulgaria

exercises a monopoly on all the enforcement of court decisions and other enforceable titles in

civil matters starting from the initiation of the case, assessing and appraising debtor’s property,

auctioning debtor’s assets, transferring property and disbursing monies to creditor in

accordance to the statutory order of privileges. Although in practice the majority of the case

management operations in PEOs offices are computerized and automated, the authentic set of

documents representing the statutory legal procedure consists of paper case files.

5.1. Attachment on movables

Presently there are neither statutory basis nor practical applications of electronic means to

levy procedural encumbrances, such as arrests, distrains nor liens on debtor’s movable or

immovable property. An arrest on movables takes effect by serving the notice of arrest to the

debtor. The description of the item(s) subject of execution must either be included in the notice

or a concurrent inventory is conducted. Should an item is subject to enlistment in a specialized

administrative register (e.g. motor vehicles, ships, airplanes and etc.) or to an administrative

register for collaterals (The Special Pledges Register, Bulgarian Register of Shipping and etc.)

the arrest/attachment both as a preliminary security measure or as an enforcement instrument,

must be entered in the respective register as well. Currently all official filings in the registers

as well as attachments, legal notifications and other pertinent operations are performed via

submission of paper documents and respectively – via personal process service or mail. No

electronic means of communication or data transfers are applied.

5.2. Attachment on immovable

The lack of statutory provisions as well as of practical mechanisms in terms of IT instruments

aforementioned in regard to movable property is valid for the immovable property being subject

to enforcement as well. Unlike movables, the immovable property, in terms of acquirement,

titles, transactions and encumbrances thereof is subject to mandatory recording in the land

register and the cadastral register (see Chapter IV, paragraph 1.6, page 47 infra). These registers

are accessible online. Titles and orders of distraint are also digitalized in the register database

through scanned copies in most cases. The mechanism of directing an enforcement against

such property however is applied via filing of the respective request on behalf of the

enforcement officer on paper at the respective regional office of the Registry Agency. Lifting

the procedural encumbrances and/or protective distress is also performed by filing and

recording the officer’s order embodied in a paper document.

As far as electronic auctions of debtor’s property in Bulgaria are concerned, at the moment

of preparation of present report they are yet part of the future. Several versions of pending

legislative bills envisage the introduction of electronic auctions in the Code of Civil Procedure.

Nevertheless, at the present moment all existing varieties of public sales (art.474-481 CCP;

art.487-496 CCP; art.238-253 Tax Procedure Code) as well as sales of debtor’s property

through stores or registered specialized markets, are performed on site via review of bidding

offers by the officer on paper and of verbal announcements where applicable in the physical

29


presence of the bidders. The latter is valid both for movable and immovable property subject

to enforcement.19

5.3. Enforcement against Receivables

Debtor’s receivables in Bulgaria are detectable for enforcement purposed through two major

venues. For corporate entities or any person conducting commercial business, an official record

with the National Revenue Agency is maintained. For a VAT registered businesses such

invaluable information is contained in the sales register – a database of all VAT taxable

transactions on monthly basis. The NRA also provides information for other taxable income

of debtor which one is legally bound to report, such as income from rent, payments for leasing

19 That situation has been significantly changed by recent legislative developments: Law for amending and

supplementing the Civil Procedure Code adopted by the 44th National Assembly on 18 October 2017, to wit:

§ 62. In Chapter Forty-third a Section II is created with Art. 501a - 501g: "Section II Electronic public auctions”

Art. 501a. (1) An item under enforcement may be sold under the rules of an electronic public auction.

(2) Upon written request of a party to the enforcement proceedings, the bailiff shall conduct an electronic public

auction. The bailiff may appoint an electronic public auction by own discretion.

(3) The purchase at the electronic public auction may be financed by a bank or credit institution registered under

the Law on Credit Institutions.

(4) Upon a written request of the real estate owner, a bailiff may hold an electronic public auction without a writ

of execution. In the case of a mortgage or special pledge on the property for the auction, the written consent of the

mortgage or pledge creditor is required. The initial price of the property is indicated by the owner and, in the case

of a mortgage or special pledge, by the owner and the secured creditor. The distribution of the amounts received

shall be subject to appeal and shall be subject to appeal under the procedure of Art. 462 and 463.

(5) The Ministry of Justice shall establish and maintain a unified online platform for electronic public auctions.

(6) The Minister of Justice shall issue an Ordinance on the organization, rules and activities of the online platform

for electronic public auctions.

Determination of starting price and announcement of the auction

Art. 501b. (1) The initial price of the items shall be determined by the order of Art. 468 and 485.

(2) The bailiff shall announce the sale under Art. 487 and the Online Public Procurement Platform of the

Ministry of Justice.

Place of the auction

Art. 501c. (1) The place of the electronic public auction is the online platform for electronic public auctions at

the Ministry of Justice.

(2) The electronic public auction is held for 7 days and ends on the day specified in the announcement.

Registering bidders

Art. 501g. (1) For bidding, each bidder makes a deposit in the amount under Art. 489, para. 1.

(2) The bidders' registration shall be made in the electronic environment with an electronic signature or in the

office of a bailiff.

(3) The registration of the bidders for participation in the electronic auction shall last for one month and shall end

at 17.00 on the day specified in the announcement.

(4) The executor of the sale shall authorize or refuse authorization of the registered bidder within 5 days of the

bidder's registration. The bailiff refuses authorization if no deposit has been paid, as in the 490, para. 1.

…….

Organizing an electronic public auction

Art. 501f. (1) The electronic public auction is held for 7 days and ends at 17.00 on the last day in the event that

no new bidding bid has been submitted during the last 10 minutes of the auction.

(2) If a new bidding bid is submitted during the last 10 minutes of the auction, the auction shall be extended

automatically for a further 10 minutes. The auction ends after no bidding bid has been submitted in the last 10

minutes.

(3) Bidding proposals shall be increased by one step. The last bid is public on the online auction platform.

(4) After the electronic public auction ends, the e-auction platform sends an automated message to all authorized

bidders on the price of the property.

(5) The full price shall be paid by the declared to buyer within the term under Art. 492, para. 3. In the case of a

procured buyer, Art. 495.

(6) In case of non-payment of the price, Art. 493.

30


agricultural land, leasing movables and etc. Based on that information the enforcement officer

may direct an attachment notice to the person or entity, which potentially owes monies to the

debtor. The latter is a PEO’s prerogative regardless whether debtor’s counterpart has already

fulfilled one’s obligations to debtor or not. Within three days, the counterpart in question is

obliged to provide a formal response to PEO whether there is in fact a pending payment due to

debtor, whether there are other claims against same due payment, whether there are other

attachments based on other enforcement titles on the same due payment. In case there aren’t

any legal obstacles the third party is obliged to pay the due monies to PEO’s fiduciary account

and by that payment his/her debt to the debtor is legally satisfied. The third party’s obligation

to act upon receipt of said attachment notice is warranted by the creditor’s right to a legal action

against the third party should the latter ignores one’s obligations under the attachment notice

and pay directly to the debtor. At present all attachments and related notifications are performed

via paper documents, by filing with the respective party and/or process service. No electronic

means of imposition of distraint or notification is stipulated by law.

5.4. Electronic attachment of commercial company shares

The attachment of commercial company shares is regulated in Art.517 CPC20 and is directly

related to the PEO’s prerogative to investigate a debtor’s company, share proprietorship or a

company which is a debtor itself. The electronic (online) venue to attach commercial company

shares is a relatively new development which marks a significant step towards replacing tedious

official correspondence on paper with a fast, efficient and far cheaper in comparison virtual

process. The attachment is levied by filling out an electronic form on the Commercial Registry

site, signed with PEO’s qualified electronic signature. The PEO fills out the Unified

identification code (UIC) of the Company in which the distraint will be imposed, the data of

20 Art. 517. (1) Distraint on a share of a trade company shall be imposed by sending a distraint notification to the

Registry Agency. The distraint shall be entered under the procedure of registration of a pledge on a share of a trade

company and shall have effect from the moment of its entry. The Registry Agency shall inform the company about

the registered distraint.

(2) When the execution is directed on a share of a general partner, the bailiff, by ascertaining the fulfilment of the

requirements under Art. 96, Para 1 of the Commercial Law, shall present to the company and to the remaining

general partners the statement of the appellant for termination of the company. Upon expiration of six months the

bailiff shall empower the creditor to lay a claim before the district court at the main office of the company for its

termination. The court shall reject the claim if it finds that the receivable of the creditor has been remedied. If it

finds that the claim is grounded, the court shall terminate the company. The termination shall be registered ex-

officio into the commercial register, after which liquidation shall be carried out.

(3) When the execution is directed on a share of a limited partner the bailiff shall serve to the company the

statement of the creditor for termination of the participation of the debtor in the company. Upon expiration of three

months the bailiff shall empower the creditor to lay a claim before the district court at the main office of the

company for its termination. The court shall reject the claim if it finds that the company has paid to the creditor

the share of the property belonging to the partner, determined according to Art. 125, Para 3 of the Commercial

Law. If it finds that the claim is grounded the court shall terminate the company. The termination shall be registered

ex-officio, after which liquidation shall be carried out.

(4) If the execution is directed on all of the shares of the company, the claim for its termination may be submitted

after the distraint is registered and without observing the requirements of Art. 96, Para 1 of the Commercial Law,

without serving of a statement for termination of the company or of the participation of the debtors in the company.

The court shall deny the claim if it finds that the receivable of the creditor is satisfied before the end of the first

session on the lawsuit. If it finds that the claim is grounded, the court shall terminate the company and this shall

be registered ex-officio into the commercial register, after which liquidation shall be carried out.

31


the applicant (in this case of the enforcement officer), the data of the person/entity in favor of

whom the distraint is imposed (Personal ID No/Foreigner ID No, business name/title and

UIC/BULSTAT code; if the person does not have a Personal ID No/Foreigner ID No/UIC, the

enforcement officer fills in the address data), date of the court / enforcement officer / public

executor and the number of the case on which the distraint was imposed. The enforcement

officer must also indicate the amount and currency of the sum for which the seizure is enforced,

the amount of interest rate, which is charged on the principal sum and the number of shares and

the data of the Partner(s), whose share is distrained.

5.5. Enforcement against securities

The specificity of the regulation and legal regime of securities as well as the multitude of

varieties of these instruments (including company shares, debt instruments, financial futures

and other derivatives, bills of exchange and etc.) predetermines a special type of expertise in

the area including, but not limited to business and commercial law, financial markets, banking

operations and the related structural and licensing laws and procedures thereof.

A chronic problem of enforcement against securities in Bulgaria is the legislative “lagging”

in terms of specialized enforcement legislation on the subject matter. Until the gradual changes

to the Bulgarian Code of Civil Procedure in the beginning of the XXI century, company shares

and stocks were not eligible object of enforcement. Presently all kinds of securities, regardless

of their form (material or non-material) or whether they materialize monetary claims or other

rights could be enforced upon (art. 515 – 516 CCP). These could be corporate shares and stocks,

temporary certificates substituting stocks, bonds, government securities, subscription rights for

shares of a public company, promissory notes, checks, bills and etc. Regardless of this obvious

utility, there are practical problems. For example, the seizing of material stocks and bonds

suggests their physical seizure by an enforcement officer therefore defining their exact location

(art. 515 CCP). Because of the subjective restrictions (only debtor may be subject of

enforcement) of the writ of execution the enforcement officer can seize bonds (or other material

securities), only if they are in debtor’s possession and in debtor’s premises. If the securities are

in the possession of the debtor, the enforcement officer must ensure that they are debtor’s

property. In case securities are located, in the inventory record of the seizure, the enforcement

officer must make a definitive description and note the means through which it was ascertained

that the securities in question are debtor’s property.

The difference between material and non-material securities is in their holder. Non-material

securities and similar financial and or commercial rights exist by the virtue of their registration

in the register of Central Depository Institution (Central Depository). Central Depository, like

any other government institution, bears the obligation to inform PEO of any registered securities

in the name of the debtor upon request. Seizure is imposed by garnishment (arrest) notice to

the Central Depository. Garnishment is considered imposed not by the entry into the Central

Depository, which in practice may take some technical time (in a measure of days) but upon

receipt of the garnishment notice. Central Depository must immediately inform the regulated

market where the securities are traded (if at all). Within three days after service of the

garnishment, the Central Depository must inform the enforcement agent what kind of bonds the

debtor owes; whether garnishments has been imposed on the same bonds under other writs of

execution as well, and for what claims. Upon receipt of the garnishment communication, any

32


transaction with the non-material securities may occur solely by an act of the enforcement

officer. Following garnishment the creditor may move for either an award of the receivables

under the security for collection in lieu of payment or request a public auction. Non-material

securities are to be sold by a bank in the statutory manner established for said securities. The

enforcement officer directs the transaction on the account (expense) of the debtor. The

enforcement process is mediated by the bank in the capacity of a licensed investment broker,

but the sale is compulsory, regardless and despite the will of the debtor.

Presently there are not direct electronic means for attaching and/or auctioning of securities

as subject to enforcement procedure. It has to be noted that the mechanism of electronic

attachment of company shares described in part 5.4, (page 30 supra) is not applicable to

securities. Despite that in the process of establishing the availability and the ownership of said

financial instruments, there could be some elements of electronic database references or

notifications via electronic means, all substantial operations related to the legal substance of the

enforcement procedure are performed via paper documents, by filing with the respective entity

and/or process service.

5.6. Enforcement on receivables, trademark, patent license, industrial samples and

other intangible property rights

There is not direct mechanism in the Code of Civil Procedure, and in any other law for that

matter, for enforcement against receivables21. Despite the insistence in legal doctrine and

among law practitioners in Bulgaria for regulating the attachment and auctioning of receivables,

the legislator has not presently accepted that. The market of receivables in Bulgaria, though, is

substantial. This method of enforcement is used in cashing down debtor’s assets included in the

insolvency estate under the provisions of Section IV of the Bulgarian Commercial Act. It is also

regulated by the Bank Insolvency Act (arg. Art. 76, Par. 3 Bank Insolvency Act). Bulgarian

legislation has accepted, on the account of this that receivables may be assigned to the creditor

under art. 510 CCP. The existing statutory frame of judicial enforcement suffers a substantial

deficit since a receivable may be assigned in lieu of payment but there is not legal stipulation

for inventory and public auction of receivables.

Recent legislative developments (Law for amending and supplementing the Civil Procedure

Code adopted by the 44th National Assembly on 18 October 2017) finally “made-up” for a long

expected enforcement means – arrest and auctioning of rights, subject to industrial property.

According to the newly adopted article 518a of the Civil Procedural code judicial enforcement

may be directed at a trademark, patent, utility model, industrial design, integrated circuit

topology, plant variety and (animal) breed certificate. The sale of such intangible property rights

is conducted by the judicial officer in the fashion of public auction of immovable property at a

starting price being determined by the order of art. 468 and 485 of CCP. To secure creditor’s

claim and warrant the accomplishment of the enforcement process, the judicial officer may levy

an attachment of the debtor's right on the respective intangible asset, by filing an arrest order in

the state register for the respective assets and/or intellectual property rights. The collateral

imposed would have effect vis-à-vis the proprietor of the respective object or the exclusive

21 Please take note that “receivable” in present context denotes a documented debt, which is subject to a

transaction as a whole asset as in cession contract

33


licensee from the date of receipt of the notice of arrest, while in relation to third parties, from

the date of entry of the arrest into the respective state register.

The sale is entered in the state register at the request of the buyer or upon a notice of the

judicial officer, accompanied by the formal deed of assignment of property. A new certificate

of entitlement (or respective license) is issued to the new proprietor.

The property transfer shall have effect in relation to third parties from the date of the entry

in the register, unless there are special statutory stipulations for the transfer of rights to take

effect from the date of a publication.

In the case of judicial enforcement against objects of industrial property, the applicable rules

shall correspondingly refer to the stipulations of art. 21 of the Marks and Geographical

Designations Act, art. 4 of the Patents and Registration of Utility Models Act, art. 24 of the

Industrial Design Act, art. 19 of the Topography of Integrated Circuits Act and art. 6 of the Law

on the Protection of New Varieties of Plants and Animal Breeds.

The new legislation does not directly provide for electronic means for attaching and/or

auctioning of said objects of industrial property. Since the registration and data management

of related state registers are sufficiently computerized, more so qualified is the staff handling

the procedure, there is reason to believe that dematerialized means of enforcement shall soon

find a way through.

5.7. Attachment on bank accounts

5.7.1. Electronic attachment (arrest) of bank accounts

Electronic attachment of funds available in debtor’s bank account (see footnote 6 on pg.15

supra) was introduced by art. 450a (1) CPC in 2011. In 2013 the technical platform - Unified

environment for exchange of electronic distraints was created. Effective as of 1st of January,

2013, the attachment on debtor's bank account is supposed to be imposed by the enforcement

officer through attachment notification in electronic form, signed with qualified electronic

signature, via the Unified Environment for Exchange of Electronic Distraints. As mentioned

above, the stipulation is dormant for the lack of joint regulation for a single standard on behalf

of the Justice Ministry and the National (Central) Bank. The attachment notice, the bank’s

answer, the notice of the lifting of the attachment, the confirmation of the message received and

other statements concerning the imposition, implementation and lifting of the seizure (presently

all written on paper and physically delivered in each bank) are to be submitted and maintained

in the system through a single standard approved by the Chairman of the National Bank and the

Minister of Justice. The implementation of electronic attachments would reduce the cost of the

process substantially. The lack of implementation of this effective mechanism is one of the sad

examples of a mismatch of priorities and bureaucratic glitches of the Bulgarian administration.

Chapter III: Technical aspects

1. E-Justice Initiatives related to enforcement procedures:

1.1. Service of documents

Besides the detailed reference on the subject set out in Chapter II, par. 2 (pg. 22 supra) there

are no e-justice initiatives related to the service of documents per se in the procedural legislation

related to enforcement in Republic of Bulgaria. Even in most recent major legislative

34


amendments in the Code of Civil Procedure (voted in Parliament on October 18th 2017) the

emphasis is on a very conservative “in-person service” approach targeting utmost debtor’s

protection.

1.2. Existing databases and systems hosting information related to enforcement of

claims. Access to information.

There are many databases functioning in Bulgaria which host information related to debtor’s

status and property rights and are entirely or in part digitalized (e.g. notary deeds database

within the Registry Agency, Central Register of Special Pledges; Patent Agency; Automated

System for Motor Vehicles Registration and etc.). At present however, they do not allow

remote access for the purpose of judicial enforcement. This is partly due to a lack of

administrative capacity both in terms of technical logistics and competent agency personnel,

and in part to an ever present concern in the Bulgarian political mentality that streamlining of

enforcement would unduly hurt debtor’s rights. The access of the judicial officer to information

in such databases is through official correspondence (on paper) in writing. These databases

have been generally accounted for above, and because the focus of present chapter is automated

access to information, the following review concerns only databases accessible strictly by

electronic means.

1.2.1. Automated references and extraction of information. Automated enforcement

procedures:

- National Population Database: the data from this register is accessible through remote

access by the PEO, via a secured channel using qualified electronic signature in compliance

with the requirements of the Electronic Document and Electronic Signature Act. For details,

please review Chapter IV, section 1.1. (pg. 44 infra)

- National Revenue Agency Database for reported real property, motor vehicles, registered

employment contracts, income from rent and other taxable revenue, VAT taxable transactions

and etc. The access to the database is somewhat of a “hybrid nature”: the PEO’s access to file

an enquiry is through a segment of the Agency web site, which is granted via a special log,

unique for each enforcement officer where PEO’s electronic signature is used. Detailed

information of debtor’s particulars, PEO’s status as well as case registration number are to be

entered into the system. The requested information, on the other hand is sent to the PEO via e-

mail message from NRA where the relevant information is contained in a scanned document.

- Register of Bank Accounts and Safe Deposit Boxes hosted by the Bulgarian National Bank.

The database is accessible the same way as the above described registers. PEO is identified via

qualified electronic signature and enters information about the debtor, the PEO’s capacity, case

registration number to receive information on debtor’s bank accounts and / or safe deposit

boxes. For detailed description of registers functionality, please review Chapter IV, section 1.3.

(pg. 45 infra).

- National Social Security Institute Database for registered employment contracts and related

social security withholding, as well as information for state pensions. Unlike the Revenue

Agency system, PEO is granted access to debtor’s information in the database, through one’s

qualified electronic signature. PEO must fill out an on-line application with information of

debtor’s particulars, PEO’s status as well as case registration number.

35


1.2.2. Automated enforcement procedures:

In order to levy an electronic arrest (attachment) on company shares, which at present is the

only electronic arrest in the practice of Bulgarian judicial enforcement, PEO must fill out an

electronic application on the Commercial Register web site, signed by a qualified electronic

signature. For detailed description of the attachment mechanism, please review Chapter II,

section 5.4. (pg. 30 supra).

2. Systems for e-signatures and data access systems

In general terms qualified electronic signature represents a duly certified electronic device

designed to replace a personal written signature where transfer of digital information is sought

instead of physical transfer of a paper document. By definition and statute the electronic

signature is a unique designation of a physical person and the very process of issuing one

warrants sufficient identification by the certified provider of the potential holder of the

electronic signature. The electronic signature is a unique pair of digital keys. The first key is

private and secret. It combines something the key owner holds with something he knows. It is

generated and stored on a smart card possessed by the key owner. Access to the card and the

key in it is belongs to the key owner (him being the owner of the signature) via the ARC code

(the unique code he knows). The signature holder signs with the private key. The other key of

the pair is public. It is necessary to read the signature with the private key. The public key is

held and published by the respective provider for each signature issued, provided it is authorized

by its owner and can be viewed and downloaded by anyone. This makes it possible to read the

documents signed by the respective owner of the private key. If a public key other than the key

in the pair is used, the signature cannot be read.

Although it would hardly be any different both as concept and as technical parameters from

any EU jurisdiction, the electronic signature in Bulgaria warrants authenticity and veracity as

well as irrevocability of the signed electronic document. A signed electronic document remains

authentically signed, regardless of whether it is stored on magnetic, optical or other media,

whether it is sent by e-mail or accessed via the Internet. Under present active legislation placing

an electronic signature means that:

- The signatory is identified as the author of the electronic document;

- The signatory has agreed with the content of the document;

- The signatory has protected the document from subsequent changes.

Qualified electronic signature is an advanced electronic signature, which is accompanied by

a certificate for qualified electronic signature issued by the CSProvider which meets the

requirements of Art. 24 of the LEDES22 and certifying the relationship between the author and

22 Certificate

Art. 24. (1) The certificate is an electronic document, issued and signed by the certification-service-provider,

which contains:

1. indication that the certificate was issued for a qualified electronic signature;

2. the name and address of the certification-service-provider and the country in which provider’s business is

established;

3. the name or alias of the author of the electronic signature;

36


the public key for signature verification. It is created using a secure signature creation device

(SSCD + PP). The Qualified Electronic Signature Certificate contains information about the

Signatory (Author) and the represented person (Holder), such as:

• Name / Company or organization name

• PIN (or personal alien number)

• Single Identity Code - UIC (if company)

• Address

• Other data

Electronic signatures provide a high level of security, guaranteed in two ways:

• By encrypting the signature itself

• Via the private-public key system

The document signed with an electronic signature is protected from changes. Once signed,

any change makes the signature invalid and the recipient is warned that the document has not

retained its original content.

The most commonly used encryption system in the data access and dematerialized exchange

related to the judicial enforcement in Bulgaria is the asymmetric data encryption system based

on a pair of public and private keys. The private key is used to generate and encode the

electronic signature using a specific algorithm. This allows only the person who created the

electronically signed document to access it. The private key is associated with a corresponding

public key, which allows the encrypted message to be read and the e-statement and the integrity

of its content authenticated by anyone holding the public key.

As far as systems for e-certification of judicial officers and systems for initialization of

enforcement proceedings are concerned, such specialized approaches are not yet established in

Bulgaria. Judicial officers are granted qualified electronic signatures as well as other

specialized (key/token) devises under the same statutory rules as other qualified individuals,

entitled to administer secure electronic data transfers. Access of PEOs to restricted databases,

based on PEO’s public prerogatives is granted not based on any e-certification but rather based

on their professional capacity, regardless of whether these databased are approached via

electronic means or paper requests for obtaining debtor’s information.

3. Directory services

4. special requisites associated with the author if the certificate is issued for a specific purpose, and if the

provider maintains a policy of issuing certificates with the entry of such requisites;

5. the public key corresponding to the private key held by the author for the creation of the qualified

electronic signature;

6. the advanced electronic signature of the certification service provider;

7. the period of validity of the certificate;

8. limitations on the effect of the signature on the purposes and / or the value of the transactions if the

certificate is issued with the limitation of the certification act;

9. the unique identification code of the certificate;

10. Instruction on the accreditation of the supplier when he is accredited.

(2) (Revoked - SG 100/10, in force from 01.07.2011).

(3) (Revoked - SG 100/10, in force from 01.07.2011).

(4) The entitled person and the author shall be obliged to immediately notify the provider of certification

services of any changes in the circumstances stated in the certificate.

(5) Changes in the circumstances stated in the certificate cannot be opposed to third bona fide persons.

37


Based on the objective of the ENABLE project, to wit: e-justice solutions for access and

exchange of information among judicial officers, following comments are based on the

assumption that a subject of interest for the purpose of the report are directories of licensed

legal professionals, organized in professional “guilds” such as judicial officers, notaries and

attorneys-at-law. These are the three categories of legal professionals functioning as liberal

professions in the Republic of Bulgaria, who perform the major functions related to

administration of justice and implication of legal rights and obligations. All three are strictly

licensed and regulated by the state. All practicing professionals must hold MA degree in Law

(as a minimal professional standard), have undertaken mandatory practical training and have

passed state exam per art.294-301 of Judicial Authority Act. All of these three groups of

professionals are also licensed through a specialized testing procedure according to the

respective regulatory statute to perform their specific professional duties23.

- Register of the Notary Chamber of Republic of Bulgaria (http://www.notary-

chamber.org/en/notaries). Organization responsible for the maintenance of the register is The

Notary Chamber of the Republic of Bulgaria is a full member of the Association of European

Network of Registers of wills. According to the information from the Chamber’s web site, the

Bulgarian register is linked to the European Network of Registers of wills. The Notary

Chamber, which is the sole professional organization of notaries in Bulgaria, is competent to

manage matters related to licensing, membership and control thereof. The register is accessible

on-line and is updated on regular basis. It reflects the active professional status of notaries and

their authorized assistant-notaries. The register provides up-to-date information for location,

area of jurisdictionas well as contact information for the respective notary.

- Register of the Chamber of Private Enforcement Officers of Republic of Bulgaria

(https://www.bcpea.org/english/ss.php). Organization responsible for the maintenance of the

register is the Chamber of PEOs. The register is accessible online and is updated on a regular

basis. The register provides up-to-date information for all acting private enforcement officers

and licensed PEO assistants in Bulgaria, address of offices, area of jurisdictions, contact

information for each PEO. Relevant information is provided of suspended PEOs, as well as the

statutory ground thereof.

- Bulgarian Bar Register – official register for practicing attorneys-at-law (http://bar-

register.bg/public/StartPage.aspx?ReturnUrl=%2fpublic). Organization responsible for the

maintenance of the register is the The Supreme Bar Council of Republic of Bulgaria. The

register is accessible online and is updated on regular basis. The register provides up-to-date

information for all acting attorneys-at-law, district bar association of membership, licensed

junior attorneys and assistants, lawyer partnerships and law firms in Bulgaria, address of

23 Private Enforcement Officers Act – Chapter II, sec. 1, art. 5-13 “Acquiring Legal Capacity of a

Private Enforcement Officer”

Notaries and Notarial Practice Act - Chapter II, sec. 1, art. 11-15 “Acquiring Legal Capacity of a

Notary”

Bulgarian Bar Act - Chapter II, art. 6-9 “Acquiring Legal Capacity as an Attorney-at-Law”

38


offices, area of practice, contact information. Relevant information is provided of suspended

practitioners as well as of imposed disciplinary sanctions under the Bulgarian Bar Act.

4. Electronic Communication Infrastructures

As commented in Chapter I section 2.2 pg. 4-9 above, despite voluminous strategic planning

on highest government level and several “in construction” projects such as the Unified e-Justice

Portal (https://ecase.justice.bg/), practically there is no functioning nationwide infrastructure

for e-justice exchange. By design the portal is supposed to provide online access to digitalized

case information as well as filing of evidence in form of an electronic documents directly with

the trial court. In reality there is active connection to just 10 out of 113 district courts and 8 out

of 28 provincial courts. There is partial case digitalization within the court system for cases

filed for the last 2-2 ½ years and cases are exchanged as scanned copies among different courts

mostly for the purposes of appeal reviews. No universal digitalization is feasible in the near

future, considering current IT capacity, much less a functioning system for secured exchange

of electronic data as part of the case processing and adjudication. For security purposes judges

are restricted from “external” exchange of case information via an e-mail with the parties to a

case or their attorneys-at-law. One limited exception is the service via an e-mail through the

respective court clerk’s office, in the case where such e-mail address is explicitly agreed and

granted by the party on case by case basis. Based on the above, no national interoperability

framework in the area of e-Justice could be claimed to be presently existent in Bulgaria. Much

less it could be claimed that national secure e-delivery infrastructure supporting electronic

service of documents and exchange of sensitive information exists. Due to low administrative

capacity and lack of IT qualification within the civil service in general, solutions, even at highest

legislative level, are conservative and at times - obsolete. Recent CCP amendments affirmed

yet again in person service by a judicial process server not only of paper versions of the

summons (notices) but of paper versions of the enforcement title and all pertinent addendums

as the legitimate means for valid inception of the procedure. According to § 27 of the Law for

amending and supplementing the Civil Procedure Code adopted by the 44th National Assembly

on 18 October 2017 the notice of enforcement in the case of a debtor – physical person, must

not only be served in person, but the particulars of the service be explicitly marked on each

page of said paper documents.

5. Access to ICT Networks and Facilities

5.1. eIDAS e-signature and eSeals legislation

Based on Regulation (EU) No 910/2014 (Regulation / eIDAS) of the European Parliament

and of the Council on Electronic Identification and Certification Services for Electronic

Transactions in the Domestic Market, Bulgarian legislator adopted the Electronic Identification

Act and implementing rules thereof, of an electronic identity certificate, a formalized official

electronic document, represented by a generally accepted standard, issued with a fixed term of

validity and containing an electronic identifier and other pertinent data.

EIDAS's scope of action and new regulatory mechanisms include administrative-

institutional relations of governance. Electronic submissions related to filing an application,

entry in registers, updating of personal information, etc. digital interactions are granted equal

status as such done in the physical presence of the individual with a valid ID document. The

39


project constitutes a comprehensive infrastructure through which all state systems can identify

citizens. In compliance the Electronic Governance Act (E-Governance Act), a new State

Agency for Electronic Governance (SAEG) is established at the Council of Ministers, which

envisages the establishment of an electronic identification center. The Agency shall cooperate

and interact on e-Governance issues with the competent authorities of the Member States of the

European Union, the institutions of the European Union and other international organizations.

The Agency will coordinate the adoption and implementation of government standards in the

area of e-Governance. The E-Governance Act also provides for the creation of a new state

company "Unified System Operator". It will carry out public functions by supporting the

activities of the SAEG as an information contact center for serving citizens and businesses as

well as government bodies using the shared information resources. The company is meant to

build and maintain a National Spatial Data Portal to connect with the Geospatial Info

Infrastructure for Spatial Information of the European Community (INSPIRE).

The implemental regulations to the E-Governance Act allows the use of existing means of

identification, and they will be able to pass through the same process through which the new

electronic identity. These are, for example, the Qualified Electronic Signature (QES) and the

PIC of the National Revenue Agency. From the user's point of view, this means entering the

administration site, clicking on the "sign in" button, selecting an input (e-ID, QES, PIC).

Implementation of the new legislative frame shall create a national point of integration with

other Member States (under EU Regulation 910/2014) so that Bulgarian citizens may use

electronic services in EU MS. In practical terms the development of said infrastructure is yet

ongoing. The Electronic Identification Act was passed in May 2016, and the regulation - few

months later. On these basis a technical specification was prepared by the end of 2016. The

public order for the system itself was announced in May 2017 after a contract with the

Managing Authority of the Operational Program "Good Governance" was signed and the entire

documentation under the Public Orders Act was prepared. As long as the entire operation is

warranted by an adequate budgetary funds there are sufficient grounds for positive expectations.

As most of the effective IT solutions on a government level in Bulgaria however, this one is

still part of the future.

Recently, two pieces of implemental regulations were introduced, which establish the

framework for electronic process in the court system. Ordinance No. 5 of 1.06.2017 of the

High Judicial Council on the organization and order of keeping, preserving and accessing the

electronic cases and the way of keeping the evidence and the means of evidence in the cases as

well as the internal turnover and the storage of other information processed by the judicial

administration (SG, No. 47 of 13.06.2017) was issued on the grounds of Art. 360i of the Judicial

System Act. Also Internal Rules for the Use of Electronic Signature and Electronic

Identification by the Judiciary Authorities, was adopted by the the Supreme Judicial Council

on the grounds of Art. 360k of the Judicial System Act with a decision under item 39 of Protocol

No. 10 of 16.03.2017 (promulgated, SG, No. 32 of 21.04.2017). Based on these implemental

rules it is expected that gradually the judicial system would begin processing electronic cases

based on dematerialized applications, evidence and corresponding procedural mechanisms

based on the existing legislative framework described in Chapter I, sec. 2.2. (page 4 supra).

5.2. The Electronic Document and Electronic Signature Act (EDESA) came into force

in 2001 and granted electronic documents legal weight and legitimacy of authentic statements,

40


which up to that moment had signed and stamped (where necessary) paper documents.

Additionally, the signing with a basic, advanced or qualified electronic signature was

recognized in terms of legal significance and ensuing consequences to possess the value of a

handwritten signature.

EDESA is consistent with the provisions of Directive 1999/93/EC of the European

Parliament and the Council of 13 December 1999 for a Community framework for electronic

signatures (in force as of 20.01.2000). Furthermore, it is also consistent with a number of

existing legislative solutions in other countries. Amendments subject to current vocatio legis24,

it will implement the provisions of the Regulation (EU) No 910/2014 on Electronic

Identification and Certification Services for Electronic Transactions for the Internal Market.

The new texts are to create rules for a wider range of electronic authentication services -

creation, verification, and validation of electronic signatures and electronic stamps, as well as

electronic time stamps, confidential e-mail services and authentication of web sites. The title of

the law is also subject to modification, to wit: Electronic Document and Electronic Certification

Services Act.

The legislation sets out that the devices for creation of qualified electronic signatures and

seals will be subject to certification in order to ensure their compliance with the Regulation

(EU) No 910/2014. Certification organizations will be accredited by a national authority - the

“Bulgarian Accreditation Service” Executive Agency. The status of the certification service

providers is also regulated – an entity issuing electronic signatures certificates and maintains a

public electronic register thereof. The provider must warrant signature holder’s ability to create

private and public keys as well as granting access to the certificates register on behalf of third

parties. The requirements for the providers, their obligations and responsibilities to signature

holder and third parties are detailed to ensure a high standard of reliability and security of

electronic signatures. Amending legislation also establishes corresponding responsibilities of

the holder and author of the electronic signature towards third parties and provider. The

relations between the certification services provider and the holder of the electronic signature

are to be regulated by a written contract.

The entities filing to be certified as providers of qualified certification services apply to the

Communications Regulation Commission. The content of the application is explicitly stated in

art. 6, sec. 2 of the Ordinance on the Procedure for Registration of the Certification Service

Providers. The Commission (http://crc.bg:8080/dpls/apex/f?p=923:310:745170100245528) is

entrusted with creating, maintaining and publishing lists of the Providers of Certification

Services. Presently, there are 6 registered certification service providers in Bulgaria:

“Information services” AD (http://www.stampit.org)

“BORICA – BANKSERVICE” AD (http://www.b-trust.org)

“Infonotary” EAD (http://www.infonotary.com)

“SPEKTAR” AD25 (http://www.spektar.org)

“SEP BULGARIA” AD (http://www.esign.bg/)

“Evrotrust Technologies” AD (http://www.evrotrust.com)

24 EDESA – additions and amendments SG №101 of 20.12.2016, in force as of 1.01.2018. 25 As of October 10, 2016, Spectar AD, in its capacity as a certification services provider, transferred its operations

to Eurotrust Technologies AD

http://crc.bg:8080/dpls/apex/f?p=923:310:745170100245528

http://www.stampit.org/

http://www.b-trust.org/

http://www.infonotary.com/

http://www.spektar.org/

http://www.esign.bg/

http://www.evrotrust.com/

41


5.3. Participation (or planning thereof) in cross border e-Justice activities (as per e-

CODEX, Access to e-CODEX).

Presently there is no publicly accessible evidence that Bulgaria does participate in the e-

Justice Communication via Online Data Exchange project, “e-CODEX”. Despite an ongoing

deliberations and positive recognition regarding such network within the Ministry of Justice

and the High Judicial Council, there is no formal resolution originating from an official

government body authorizing joining the project. While researching the matter, present expert

encountered contradicting official statements and claims as to the level of involvement of

Bulgaria in the cross border e-Justice activities. Nonetheless, the official source of the

European Commission, to wit: (http://ec.europa.eu/justice/criminal/european-e-justice/e-

codex/index_en.htm) does not list Bulgaria as participating country. For the purposes of

assessing the comprehensiveness of the above conclusion, it has to be noted that the Bulgarian

Chamber of Private Enforcement Officers is a non-government professional body and as such

is not involved in the policy making process of said public institutions (MJ, HJC), neither it is

entitled to information thereof by statute, political tradition or equity.

5.3. Cross border e-Justice activities

Presently Bulgaria does not participate in the e-Justice cross border activities as far as civil

and commercial matters are concerned. Should such activity exists, it does not represent public

record and the Chamber of Private Enforcement Officers in Bulgaria is not acquainted thereof.

5.3.1. At present, to author’s best knowledge and belief, Bulgaria has not launched a program

for cross-border services for e-Justice in the field of European Payment Orders, Small Claims

or Mutual Legal Assistance. Should such program exists, it does not represent public record

and the Chamber of Private Enforcement Officers in Bulgaria is not informed thereof. In formal

legislative as well as practical terms said procedures are conducted in the manner described

below. Same is the expert’s position in regard of the country’s involvement in European

Interconnection of Registries Activities.

5.3.2. Execution of European Payment Order (EPO)26

Applications for issuance of EPO have be submitted to the provincial court with jurisdiction

over the permanent address or registered address of the debtor, or over the place of enforcement.

Where contestation is not excludable, the respondent may object territorial jurisdiction no later

than the deadline for contestation. The respondent may apply to the Supreme Court of Cassation

for review of the European order for payment in accordance with Article 20 of the Regulation.

The court examines the application pursuant to Chapter 24 of the CCP “Annulment of

judgments”. Process service related to EPO is performed by officer of the court, by postal or a

courier service as registered mail with return receipt. Republic of Bulgaria has taken position

EPOs are to be accompanied by a translation into Bulgarian.

5.3.3. Small claims27

An application for a writ of execution on the basis of a European Enforcement Order for an

uncontested claim or a European Small Claims Procedure shall be filed with the district court

26 Art. 625-627 of Bulgarian Civil Procedural Code in Compliance with REGULATION (EC) No 1896/2006 27 Art. 624 of Bulgarian Civil Procedural Code in Compliance with REGULATION (EC) No 861/2007

42


at the debtor's permanent address, respectively registered address of entity.

The order for issuing (or rejection) of the the writ may be appealed in accordance with Art. 623,

para. 6 CCP. Term for appeal by the petitioner is counted from the service of the order and by

the defendant from service of the notice for voluntary compliance. The appeal of the order does

not suspend the enforcement process. Suspension or limitation of the execution in the sense of

Article 23 of Regulation (EC) No 861/2007 may be ordered by the competent court.

5.3.4. Involvement in European Interconnection of Registries Activities.

Presently there is no public information of Bulgarian involvement in European

interconnection of registries activities on institutional and/or government centralized level.

That statement is subjected to the premise that such involvement includes but is not limited to

dynamic real time dematerialized exchange of case relevant information on civil and

commercial matters. The relevancy of the statement could not be influenced by some instances

of data exchange on a professional (“guild”) level such as professional networks of PEOs and/or

attorneys.

As far as subjects related to criminal justice are concerned, present expert considers such out

of the scope of the report.

6. ICT Processing and Storage Services

Presently the level of automated input, processing, control and communicative output of

dematerialized data relevant to the judicial process and to the judicial enforcement in part, is as

described in Chapter I, sec. 2.3, pg. 7-9 supra. Procedurally relevant technological approaches

such as voice recognition, electronic recording (aside from strictly criminal investigative

implications) of proceedings, collection and use of electronic evidence are not utilised despite

of the existing legislative framework. Present expert is not able to comment on “national

policy” on the matter since such, apart from ample and general political statements, has not

been extended by competent authorities to the Chamber of PEO as a coherent system of

practical steps with short or middle term feasible results. Present expert also states that the

above assertions does not regard to strictly investigative practices of gathering and international

exchange of data related to crime prevention or investigation measures, which are strictly within

the prerogatives of the police and prosecutorial authorities. Such investigative instruments are

classified and in the general case do not represent public record.

6.1. Archiving of enforcement proceedings

6.1.1. The storage of hard copies

The effective legislation does not envisage mechanisms for either PEO or the SEO at the

district courts for (1) outsourcing of the archiving of completed cases and/or (2) archiving on

electronic copies of completed cases and destruction of paper documents. Current implemental

rules - Ordinance No. 4 on the Official Archive of the Private Enforcement Officers (Ordinance

No. 4) and the Court Administration Regulations envisage the completed (finished and

terminated) enforcement cases to be kept in the offices of enforcement officers for a term of 5

years; after which to be delivered for storage in the State Archive Fund (SAF). Prior to delivery

to the SAF, the originals of the writs of execution and the other securities should be taken out

of the record files which should be kept at the offices of the private enforcement agents. Due

43


to unofficial position of the SAF, that enforcement cases do not fall into the definition of “state

archives” that provision has been dormant since its very inception. On the other hand, the

uncertainty remains that the destruction of paper files without legal authorization may be

considered a serious offense by the authorities. Thus the storage of hard copies of the completed

cases in the PEO’s offices is becoming an ongoing and unsolved problem, generating

substantial cost as well as data security concerns. Physical storage of the cases is also pointless

from a legal point of view – the best part of the documents on file are comprised of information

derived from state registers and any substantial legal rights obtained through the process (e.g.

title for an auctioned property) are subject to registry records. After the 5 years period it is only

logical for the parties to take responsibility for any document related to their legal rights. An

electronic copy of the digitalized file would be an efficient solution to the problem and is one

of the PEO Chamber priorities to be introduced in the future legislative process.

7. ICT professional and technical support training

7.1. Training policy for e-skills and programmes for professionals in the e-Justice

sector

There are not training programmes for professionals focused on e-skills per se. There are

two major training institutions in Bulgaria the activities of which fall within the scope of present

report, NIJ and ESJE, but neither of them have its focus on promotion of e-Justice.

Nevertheless, it would be these two institutions that have the authority and the means to conduct

training in the e-Justice sector. De facto training of professionals is practically sporadic and

within the respective section of the system (segment of judicial system, prosecutor office, etc.)

upon introduction of certain case management or data processing software. As it was

previously commented, in previous years IT solutions have been introduced rather sporadically

within separate agencies or departments, never on national level in integrated and functional

manner. Hence the training to operate the respective systems has been usually conducted “on

the field” by the respective system provider, seldom through seminars addressing the personnel

of the respective department. Likewise, technical training and seminars in the area of IT

applications for judicial officers are conducted by the companies generating the respective

software, as described in Chapter I, sec. 4.4., pg. 13-16 supra.

7.2. The National Institute of Justice (NIJ)

NIJ is a public institution, providing training for the Judiciary since 2004. The regulatory

framework of NIJ is contained in Chapter 11 of the Judiciary System Act and respective

implemental regulations enacted by the High Judicial Council. The focus of NIJ’s operations

is to improve the efficiency judicial process through professional training and enhancement of

qualification of Bulgarian magistrates and court clerks as well as to assess training needs and

perform as documentation centre in EU Law for the Judiciary. The NIJ is an independent entity

funded by the budget of the Judiciary and proceeds from various projects. NIJ activities by

statute are supervised by the High Judicial Council and the Ministry of Justice which hold

certain prerogatives related to staff management and policy making. NIJ provides compulsory

initial training for junior magistrates (judges or prosecutors) who have successfully passed the

entry tests. NIJ also conducts continuing training for all sitting magistrates. The emphasis in

these qualification courses is laid upon the current amendments to legislation, changes in

44


jurisprudence, interdisciplinary topics and training in EU Law. The institute also carries out

training of court administrators (judicial clerks, HR managers and etc.)

7.3. European School of Judicial Enforcement (ESJE)

ESJE is a non-government entity under the auspices of the Bulgarian Chamber of PEO,

whose purpose is to ensure better training for both bailiffs, assignees in bankruptcy, lawyers

and businessmen. The school is also open to anyone who wants to learn more about a topic

related to enforcement. The focus of ESJE educational activities is the practical aspect of

enforcement, application of European law in cases of enforcement of cross-border judicial

instruments or writs establishing public debt.

8. Hosting

The subject matter of hosting of services and data in the judicial system of Bulgaria is not a

public record. In other terms, there is no legitimate means for a person other than the

administrators of the respective courts or the system administrators, to obtain information as to

the level of hosting of data as well as to the functionalities of the hosting services. Yet again,

as already described, hosting services are arranged in terms of software and server logistics at

the level of respective courts and/or legal departments respectively in Ministry of Justice and

High Judicial Council. Some court infrastructure may unify several judicial instances, which

in practical terms would mean that a certain appellate court may have introduced an

interoperable system of data management and hosting for all court units within its jurisdiction,

i.e. the “subjugated” district and provincial courts under the jurisdiction of said appellate court.

To the best of present expert’s knowledge and belief, there is not centralized nationwide hosting

system for processing and storing of case related data of the judiciary.

As far as PEO’s data management is organized by each company who is the provider of the

respective office information system, such as described in in Chapter I, sec. 4.4., pg. 14-16

supra. It is usually a shared hosting between the PEO’s office and the respective provider.

Chapter IV: Access to information

1. Access to information for civil enforcement purposes. Domicile. Assets.

Domicile of physical persons such as permanent and current address as well as personal

information related to identity, next of kin and etc. is subject to registration in the National

Population Database. Status, parameters of incorporation, structure and domicile of legal

entities is subject to registration in the Commercial Register and the BULSTAT Register.

Information of debtor’s assets could be derived from a variety of official registers and

databases. The access is not systematically centralized, i.e. through certain unified portal or IT

platform, but rather based on separate arrangements between the Chamber and the institution

hosting the database. Enforcement officers hold prerogatives to access any available database

containing debtor’s information within the limitations of the purpose of the enforcement

procedure. The following descriptions refer only to databases which are accessed on-line via

electronic means.

1.1. National Population Database

45


The Ministry of Regional Development through the "Civil Registration and Administrative

Services" Directorate hosts the Population Register - National Population Database, which is

accessible online under specific statutory conditions for judicial authorities including PEOs.

Data related to enforcement cases includes:

1. Personal Identification Number (PIN) of the individual;

2. Name (first, middle and surname);

3. Gender;

4. Citizenship;

5. Place of birth;

6. Permanent/Current address;

7. Marital status;

8. Marriage certificate / divorce settlement;

9. Death data;

10. PIN-s, names, citizenship and indication of whether the following relatives are alive:

(A) Spouse;

(B) Mother/Father;

(C) Brothers / Sisters;

(D) Children.

The data is accessible through remote access by a secured channel using qualified electronic

signatures in compliance with the requirements of the Electronic Document and Electronic

Signature Act. The Ministry through said Directorate monitors the access to the National

Population Data, by periodical randomized samples of all inquiries by judicial authorities and

the enforcement officers. Within one month of receiving the sample, the judicial authority or

the enforcement officer is obliged to provide information on the merits of the access to the

register. In case of repeated violations, the Ministry may suspend the access of an authorised

user and notify the Commission for Personal Data Protection.

1.2. Commercial Register and Register of non-profit legal entities

The Commercial register is maintained by the Registry Agency within the structure of the

Ministry of Justice. The Register of non-profit legal entities is a separate system within the same

ministry. A separate file is kept in electronic form for each entity.

The case information in the Commercial Register includes, but is not limited to:

- Name and type of the entity; address of headquarters;

- Nature of main business activity;

- Owner/s (shareholders) of the entity;

- General partners;

- Management of the entity;

- Credentials and other relevant circumstances under the Commercial Act;

As of 01.01.2018, with the new Commercial register and The Register of non-profit legal

entities Act (Title Amend. – SG 74/16, in force from 01.01.2018), the Commercial Register and

the Register of the Non-profit legal entities is planned to be unified in a centralised electronic

database, managed by the Registry Agency, providing information of records subject to

disclosure, concerning commercial companies and branches thereof, as well as the non-profit

entities and their branches. The new integrated Agency is designed to ensure interoperability of

the presently functioning Commercial Register and the Register of Non-profit Entities within

46


the system of interconnection of the central, commercial and companies’ registers, commonly

referred to as the "Registers Interconnection System". The system is designed to provide free

information upon on-line request about the status, the liquidation proceedings of a company, a

foreign entity or a branch, insolvency proceedings or deletion from the Register.

1.3. Register of Bank Accounts and Safe Deposit Boxes hosted by the Bulgarian

National Bank

The Register of Bank Accounts and Safe Deposit Boxes, in operation since January 2017, is

regulated under Article 56а of the Law on Credit Institutions and Ordinance No. 12 of the

Bulgarian National Bank (BNB), and is maintained by the Bulgarian National Bank. It

consolidates data, reported by all banks and bank branches operating in Bulgaria on bank

accounts, the account holders, and the persons authorised to operate the accounts, as well as on

deposit box holders and their proxies.

The Register allows enforcement officers to derive information in which bank(s) the debtor

holds accounts and/or safe deposit boxes. Under the Credit Institutions Act, access to the he

Register is granted to judicial authorities and all law enforcement agencies or such with

prerogatives related to the national security, the National Revenue Agency as well as to the

judicial officers in relation to the specific statutory procedure at hand.

Compliance with the statutory requirements for submitting and receiving information from

the register is warranted by the National Bank administration. According to Instructions of the

BNB Deputy Governor dated February 14, 2017, the authorities with right to access must

formally apply, providing internal rules for authorized officers to be registered users, internal

measures for information storage and protection from unauthorized access. All authorized

applicants must enter the data for the BNB special inspection inquiries related to the use of the

database. For instance, to obtain information for a certain debtor, the PEO has to list it in the

special register, and to indicate the № of the enforcement case for which the inquiry is made.

1.4. Electronic attachment (arrest) of bank accounts

Electronic attachment of bank account receivables (see note 6 on pg. 15 supra) was

introduced by art. 450a (1) CPC in 2011. In 2013 the technical platform - Unified environment

for exchange of electronic distraints was created. Effective as of 1st of January, 2013, the

attachment on debtor's bank account is supposed to be imposed by the enforcement officer

through an attachment notification in electronic form, signed with a qualified electronic

signature, via the Unified environment for exchange of electronic distraints. As mentioned

above, the stipulation is dormant for the lack of joint regulation for a single standard on behalf

of the Justice Ministry and the National (Central) Bank. The attachment notice, the bank’s

answer, the notice of the lifting of the attachment, the confirmation of the message received and

other statements concerning the imposition, implementation and lifting of the seizure are to be

submitted and maintained in the system through a single standard approved by the Chairman of

the National Bank and the Minister of Justice. The implementation of electronic attachments

would reduce the cost. The operation is currently performed via a distraint order sent by mail

to the relevant bank. The lack of implementation of this effective mechanism is one of the sad

examples of a mismatch of priorities and bureaucratic glitches of the Bulgarian administration.

1.5. National Revenue Agency Database

47


Based on an agreement (signed July 11th, 2011), between the Chamber and NRA, the

Agency provides, at the request of the PEO, debtor’s information, which constitutes tax and

social security data (reported real estate, motor vehicles, registered employment contracts and

etc.) and/ or issues a certificate, according to Art. 191, para 1, and para 4 of the Taxation and

Social Security Procedure Code (TSSPC) attesting to any public dues of the debtor in relation

to the case filed with the bailiff. The information on declared real estate and vehicles is provided

according to the data received to the NRA from the municipalities. PEO’s request must be

related to a case file and is filed through the Electronic Services Portal of the NRA, using a

qualified electronic signature in compliance with the requirements of the Electronic Document

and Electronic Signature Act. The information is provided via PEOs e-mail service registered

with the NRA.

1.6. The Registry Agency

Registry Agency was established on July 31, 2004 with the adoption of §27 Law on

amendment and supplement the Law on Cadastre and Property Register (publ. SG 36 of April

30, 2004) and the Regulations of the Agency (SG 63 of July 20, 2004, effective July 31, 2004).

The institution merged in the 112 (presently 113 regional record offices) District Court Registry

Offices, responsible for processing and hosting the notarial records of real estate ownership and

transactions nationwide. Their officials handle all the acts, subject to registration and based on

them perform inquiries, issue certificates and make transcripts. In this way the publicity and

visibility of the entered entries are ensured, which guarantees security in real estate transactions.

The Registry Agency hosts and provides the management of the National Land Register.

Beginning as a major reform for the creating of a digitalized national cadastral map in 2006, a

single, centralized electronic system was developed and implemented under the “Cadastre and

Property Register” project. The system consists of digitalized maps of the national territory

based on specific statutory status of the type of land, such as urban territory, agricultural land,

mountain and forest terrain, protected territories and etc. The system contains data, regarding

the current ownership, easements (servitudes) and encumbrances, status (type), digital

parameters and etc. PEO’s access to the data, including the retrieval of plots of land is on line

through the Agency’s electronic portal via username and password. Although the system is yet

in process of development (some parts of the country are yet to be included in the digitalized

cadastre) the reform is a major step towards a digitalized and hence more accurate, time efficient

and cost effective management of plots of territory for the purpose of property records, real

estate transaction and all related litigation and enforcement implications.

1.7. BULSTAT Register

From August 11, 2005 the Agency took the management of another register - BULSTAT. It

includes all legal entities and branches of foreign persons who are not traders. Persons with

liberal professions as well as those engaged in craftsman activities are also eligible for

registration. The traders were obliged to register in BULSTAT, within 7 of commencement of

business, until January 1, 2008, after which this activity was taken over by the commercial

register.

1.8. The Register of Matrimonial Property Relations

48


The register consist of records related to prenuptial agreements and marital contracts

determining the status of the spouses’ property. It is a valuable source of information in all

cases where a joint marital property is subject to an enforcement procedure or the nature of a

certain property (involvement of a third person’s rights) needs to be investigated in that regard.

The Register is administrated by the Registry Agency. The data within is a public record,

inquiries can be made for the selected type of property relations. The register is centralized and

electronic. It contains data on the spouses, the number of the civil marriage act and the marital

property regime. In the event of changes in a civil marriage act, including its termination, a

notification is submitted to the relevant territorial unit of the Agency. The virtual access to the

registry system is personalized - each change is individualized and notes which of the authorised

users have made it. There is constant monitoring and control over the operation of the register.

This ensures the security of the civic records and the security of the data input. The information

system ensures transparency and quick and easy access to the entered data, regardless of the

location of users.

1.9. National Social Security Institute Database

The National Social Security Institute is a central administrative entity competent to collect

and process public funds and statutory withholdings related to national pension insurance and

health coverage. Hence the institute hosts and processes data related to the social security status

of natural persons, register of labour contracts and related withholdings due by employers, as

well as social security dues of self-employed individuals, pension entitlements. In practical

terms an enforcement officer may derive information from the database such as whether a

debtor derives an income from certain counterpart (the latter being and employer under a labour

contract or payments are based on a freelance relationship). Debtor’s information is not a public

record and is released to the PEO strictly within the powers of one’s office and related to a

particular case specified in the request. The access to the database is online via a formal request

on the NSSI official web site.

The e-application must show the number and the date of the enforcement case and lists

as follows:

I. for indebted natural persons - Personal Identification Number, respectively the quality

of self-insured persons and their BULSTAT number (if any);

II. For debtors having the capacity of legal entities – (Unified Identification Code) UIC,

as well as pertinent additional data depending on the case technical peculiarities.

Requests are submitted via an SSL secure connection. The PEO is identified in the NSSI

system through a universal electronic signature, in accordance to Electronic Document and

Electronic Signature Act. NSSI provides the requested information via the same SSL secure

connection. The access to the NSSI systems is via WEB Service and the data is received in

XML format.

2. Deficiencies related to access to information

2.1. Electronic access to state and municipal registers for the purposes of enforcement

proceedings

49


Although the Chamber succeeded to obtain remote access to the listed registers and

databases, this has been a result of decade-drawn tedious negotiations on “department by

department” and “agency by agency” basis. Therefore each access is based on different

technological means, which leads to all sorts of interoperability difficulties and glitches.

Meanwhile there is no complete electronic access to number of registers. The Chamber is

conducting negotiations with the Registry agency for remote access to scanned notary deeds

and the ability to levy an arrest on immovables electronically, which so far is fruitless. There

are ongoing negotiations with the Ministry of Interior since 2007 to request and receive

information of debtor’s registered motor vehicles, which have not brought any results yet. It

was not until 2011 that the Chamber signed an agreement for exchange of information with the

National Revenue Agency (NRA). The agreement has granted the functional access to data as

described above.

In order to optimize the enforcement proceedings, it is advisable for the state to engage more

actively in overcoming this problem. At present, the BCPEO is developing a project to build a

unified platform to ensure connectivity to all registers and automatic payment of state fees

through pre-loaded credits.

3. Cross border access to information

At present for Bulgarian judicial officers, there are no direct means of access to cross border

information of debtor’s assets.

Debtor’s assets information in registers which are not public record, i.e. accessible on a

general basis by any PC user (such as the Registry Agency Land register) is granted by the

respective authorities to Bulgarian judicial officer based on their professional capacity. In view

of the response to the question whether access to information about the debtor's assets is open

to foreign creditors/foreign enforcement organs would rather be negative based on the general

legislation. In terms of specialized legislation in the area of investigative activities related to

crime prevention, international tax evasion, or money laundering activities, present expert

refrains from speculation, since such prerogatives as well investigation instruments are usually

classified and unrelated to the subject of civil judicial enforcement.

To avoid redundancies, present expert suggests that subject of the state bodies which

administer databases relevant to enforcement be considered as part of the contents of Chapter

IV, sec. 1.1.-1.9., pg. 44-48 supra, as well as of the commentaries of the statutory state agency

control to PEO’s access to databases in Chapter I supra.

Chapter V: Other issues

Official language of judicial proceedings is Bulgarian. Unlike some jurisdictions in Western

Europe and Central Asia, the common tongue and the official language including the one used

for the purpose of legal process both written and spoken is Bulgarian. This principle is

warranted by respective stipulations in the principal procedural codes of procedure: Code of

Civil Procedure (art. 4), Criminal Procedure Code (art.21), and Administrative Procedure Code

(art. 14). In various term the codes state that the official language of proceedings is Bulgarian

and persons who do not understand or speak Bulgarian shall exercise their procedural rights

through a court appointed interpreter. Respective provisions are stipulated for the translation

of evidentiary documents and other related materials.

50


Present expert, in view of over 10 years of practical experience as an enforcement officer, is

not aware of a thematic national research or study exploring the trust of the profession or the

general population in dematerialised processes. The main reason for that is because with the

exception of certain logistical IT support on a departmental (or court) level, a dematerialised

processes of filing and reviewing civil action, gathering evidence and adjudicating claims is

virtually non-existent in Bulgaria. Therefore it is only logical to assume that if interviewed, not

just the general population (or the “laymen”) but the majority of the legal practitioners, would

hardly understand the substance of the question. That may certainly appear paradoxical in a

country as Bulgaria where computer and IT literacy among the young as well among the

middle-aged population is hardly lower than in any EU member state and the private sector is

relatively well computerized. The experience of the Bulgarian Camber of PEO and of the PEOs

themselves shows that where an efficient IT service is provided (e.g. debtor’s registry, public

auctions registry, remote access to e-file in PEO’s IT system and etc.) the customers are willing

to use such instruments promptly and efficiently. Aside from the topic of the report, there are

sectors of Bulgarian economy, such as banking and finance, where digitalization of services is

comparable to any developed industrialized country.

As a self-evident conclusion it should be stated, that the Bulgarian judicial system as well as

the political establishment as the decision maker in regard to national priorities is yet to find its

way into the IT reality of the 21st century.

Final Notice and Disclaimer

Certain topics of the Report have been substantially influenced by a very recent legislation,

to wit: “Law for amending and supplementing the Code of Civil Procedure” adopted by the

44th National Assembly on 18 October 2017. The law introduces amendments not only in the

CCP, but also in five other statutes such as the Private Enforcement Officers Act and the Tax

Procedure Code. The major body of the amending law enters into force on the 30th of October

2017, but the practical implementation of several major parts is subject to issuance of

implemental regulations with additional deadlines. For instance: the electronic arrest of

debtor’s bank accounts is deferred with 6 months until technical regulations by MJ is issued;

initiation of electronic auction procedure is “stayed” for 18 months for the same reason. In part

that legislation has been “in the making” in parliamentary committees for years and to the very

moment of voting – subject to heated debates. In view of present expert’s case load, a complete

integration of the new legislation in the Report was incompatible with meeting the deadline.

Therefore, updates to the Report where possible were made alongside the stipulations of the

same subject matter per then current legislation. There are two reasons for that. Firstly, most

of the new rules rather enrich the existing arrangements, than outright repeal them. For instance

an electronic auction is introduced, but the auction conducted in court (see sections 5.2., 5.3.,

pg. 28 infra) in the presence of the bidders has not been repealed as a (alternative) method of

selling debtor’s property. Another example is that service of extrajudicial documents by PEOs

has been introduced, but that did not affect PEO’s present prerogatives to serve procedural

papers. The other basic reason to preserve the structure and contents of the Report is a number

of precedents in Bulgaria (electronic arrest of bank accounts, centralised IT system of the

judicial enforcement, electronic filing and processing of documents as valid evidence in court

and etc.), where initiatives in the field of e-justice have been embodied in statutory rules and

yet stayed dormant for an extensive period time. It is expert’s sombre but empirically tested

51


expectation that some of the new amendments would stay “on paper” for quite some time.

Therefore, and in view of the project’s approaching deadline, the contents and general structure

of Report has been preserved while relevant additions have been introduced to throw light on

the latest statutory developments.

Disclaimer: This publication has been produced with the financial support of the Justice Programme of the European

Union. The contents of this publication are the sole responsibility of the Centre for European Constitutional Law –

Themistocles & Dimitris Tsatsos Foundation and its partners and can in no way be taken to reflect the views of the

European Commission.

ENABLE Enabling dematerialised access to information and ... › wp-content › uploads › 2018 ›...

Documents

Transcript of ENABLE Enabling dematerialised access to information and ... › wp-content › uploads › 2018 ›...