News from Bulgaria
New food law
On 27.05.2020 the Bulgarian Parliament has adopted on second reading the provisions of the new Food Law. The public discussions and adoption procedure continued more than 3 years whereas the provisions of the law were subject to numerous amendments following discussions with the interested parties (agricultural producers, various associations etc.) which led to the necessity for the law’s initial and secondary notification before the European Commission. The new law revokes the 1999 Food Law, adopted prior to the accession of Bulgaria to the EU since latter was continuously amended, causing difficulties in its practical application by both the business operators and controlling authorities.
The main purpose of the new law is to guarantee the quality and safety of food in the whole chain - from the producers of the raw materials to the sales in the retail stores, as well as ensuring high level of protection of the customers’ interests by providing information on the content and qualities of the food. In that respect, Bulgarian law reaches harmonisation with the requirements of Regulations (ЕC) No 852/853/854/2004 on the hygiene of foodstuff, as well as Regulation (EC) No1169/2011 on the provision of food information to consumers.
The Food Law regulates the requirements towards the safety of foods, business operators and employees, working in places for production, processing and/or distribution of foods. Relevant texts, regarding the requirements for packaging, labelling and presentation of foods, as well as regarding the places for production, wholesale and retail trade with materials for contacts with foods, are also envisaged. The law also regulates the requirements toward natural mineral, spring and table waters.
For the first time state control over the trade with food supplements and online sales of foods is envisaged. Also, the new law provides for extended control with respect to genetically modified foods, as their placing on the market will be permitted only following a prior approval, obtained from the EC in accordance with Regulation (ЕC) № 1829/2003 on genetically modified food and feed. The procedure for registration of vehicles for transportation of food from animal origin, as well as other foods such as bread, bakery, confectionary etc. is also envisaged.
The law further regulates the main requirements toward the packaging, labelling and advertising of foods, produced in Bulgaria. The indication “Product of Bulgaria” or “Obtained in Bulgaria” shall be placed only on foods when the basic (primary) ingredient, used for their production, is obtained on the territory of Bulgaria and all stages of the production process are carried out within the country. The indication may be accompanied with a geographical map or other symbol that contains information that the food is produced on the territory of Bulgaria. The advertising of genetically modified food is strictly regulated, whereas an explicit prohibition is envisaged for participation of children in advertising of such foods. Another prohibition regulates that business operators shall not, by advertising or other means of commercial communications, with participation of children, advertise foods that are statutory restricted for use by children, as well as foods that contain food supplements and substances with nutritional and physiological effect that do not comply with the requirements for healthy food, as per the relevant normative provisions.
As previously, the business operators, producing foods or placing foods on the market, shall be responsible for the safety of their products and quality, as well as the conformity of the food with the content of the placed label. In case of any illness, caused or due to the use of certain foods, the business operators shall be obliged to provide the necessary assistance to the competent authorities for the containment or elimination of the disease. Also, the employees, working in places for production, processing or distribution of foods, shall be subject to preliminary and periodical health inspections.
The changes in the state policy are also quite substantial, as the new law provides for the establishment of a National Council on Foods as a permanently operating consultancy body, coordinating the state policy in the foodstuff sector, aiming at supporting the work of the minister of agriculture. In addition, the Bulgarian Food Safety Agency (BFSA) and the Regional Health Inspections to the Ministry of Health remain responsible as official controlling bodies. According to the motives to the draft law, this will ensure the application of unified controlling procedures towards the foodstuff sector, as well as coordinated measures for ensuring compliance with the requirements of the relevant EU and national regulations.
BFSA shall maintain a public register of all business operators and places for production, processing and distribution of foods and food supplements, as well as the business operators and places for production of bottled natural mineral and spring waters.
The expectations are that the practical application of the new Food Law will ensure more safety of the whole food chain – from the raw material to the ready-to-be-used product, as well as achieving success in combating the grey market. The hopes are that its practical application, together with the application of the new Law for the Management of the Agri-Food Chain (adopted on 21.05.2020), would result in a more sustainable and predictable legislation in the foodstuff sector, as well as ensuring the confidence of consumers in the quality and safety of foods, including that the placed label conforms with the content of the respective product.
Amendments to the Civil Procedure Code (CPC) concerning the consumers and their creditors
The Bulgarian Parliament adopted material changes in CPC aiming to create additional guarantees for the consumers in cases of court procedures initiated against them by traders and banks.
In the Order for Payment Proceeding
After the latest amendments in the Order for Payment Proceeding, the court shall examine ex officio whether there are unfair terms in the consumer contracts. Traders offering goods and services, carrying out commercial activity in the private or in the public sector, suppliers in the chain of supply of goods to end consumers, banks, other financial institutions and monopolies shall be obliged to present a copy of the concluded consumer contract under which they are claiming receivables, along with the applicable general terms and conditions, if any. Failure to comply with the said requirement may serve as a ground for refusing the issuance of enforcement order or for canceling the decree for issuance an immediate enforcement order.
The Order for Payment Proceeding has been introduced in the CPC in order to ensure a way for prompt obtaining of a writ of execution and this is the reason why it is preferred by the business, namely in light of the fact that it is a swift and simplified procedure for recovering receivables from consumers. Before the adoption of the new amendments, traders, banks etc. only had to file an application for enforcement order, as the court merely examined whether the formal criteria determined by the law is met and did not review the application on the merits.
In the General Claim Proceeding
As a response to the controversial court practice established so far, from now on cases against consumers brought before the court shall be reviewed only as civil ones following the general claim procedure and not as commercial ones. This supplementation to the provisions of the CPC is aiming to grant the consumers maximum protection in case the creditors decide to file a claim against the debtor instead of initiating the Order for Payment Proceeding. From legal point of view, this is relevant for the subsequent access to cassation, the statutory terms for lodging a defense to the filed claim, etc.
Up to BGN 10 million fine for failing to comply with the new Measures Against Money Laundering Act
It is expected that by the end of this month the Draft Amendments to the Measures Against Money Laundering Act will have passed first session, which will introduce further new regulations to the Bulgarian legislative framework.
The foreseen amendments are bound, once again, to expand the categories of affected entities, adding up to the current ones, also persons trading or acting as intermediaries in the trade of works of art, providers engaged in exchange services related to virtual currencies, as well as wallet providers, trustee service providers etc.
With the adoption of the law, a ban shall be introduced on the opening and keeping of anonymous safe-deposit boxes or safe-deposit boxes in a fictitious name. Lower thresholds are envisaged when it comes to applying customer due diligence measures by the e-money issuers and their agents.
The regulation in the field of measures against money laundering and countering the financing of terrorism shall reach out to most of the Bulgarian businesses. The organizations will face the imperative requirements of the law and apply adequate customer due diligence measures in accordance with the relevant risk level, establish the source of the assets and source of funds, notify the State Agency for National Security in case of suspicious transactions and operations and strictly apply a number of other rules.
Despite the publicity of the abovementioned legislative amendments, still a large part of the organizations have not undertaken the necessary actions for bringing their businesses and activities in compliance with the law, which is becoming more and more restrictive with each subsequent amendment, including the introduction of fines amounting to BGN 10 million or 10 % of the annual turnover of the responsible legal entity.
The consequences and sanctions envisaged for failing to comply with the legal regulations in this field are significant and require duly and timely organized preparation by all obliged entities.