Archive for June, 2004

New Attorneys Act Adopted

Wednesday, June 30th, 2004

On June 10, 2004 the Parliament adopted a new Attorneys Act (the “Act”). The Act comes into force as of June 29, 2004, with some exceptions. The Act materially changes some of the provisions in the existing attorneys’ regime, as follows:

•the Act defines the status of the attorneys’ partnerships which may consist of both individual attorneys and attorneys’ companies. The internal relations among the members of these partnerships should be set in a written contract which is subject to registration with the respective Bar;

•under the Act, the attorneys can establish an attorneys’ company which is a legal entity. It is incorporated on the basis of a written contract concluded between two or more attorneys. The attorneys’ company should be registered with the Bar and the district court where the seat of the company is located. The Act explicitly regulates the membership rights and obligations and the status and powers of the General Meeting and the Managing Board/Manager of the attorneys’ company.

•as of January 1, 2005 the attorneys are required to have professional liability coverage.

•as of January 1, 2007 a foreign lawyer – citizen of an EU member state who is also a qualified lawyer in his or her country – may practice in Bulgaria either by providing a one-time legal assistance or by permanently establishing a practice in Bulgaria. The foreign attorney may settle and practice in Bulgaria under the name of the country where he or she is qualified to practice law but only after a mandatory registration with the Unified Register of Foreign Lawyers. If the foreign lawyer practices continuously for a period of three years or he or she passes an equalizing exam on Bulgarian law, he or she can be accepted in the Bulgarian bar and can be granted all rights attributable to a Bulgarian lawyer.

A memorandum prepared by Borislav Boyanov & Co. on the new Attorneys Act is available upon request send at mail@boyanov.com.

Borislav Boyanov & Co. Partner Participates in TerraLlex Conference

Wednesday, June 23rd, 2004

On June 10-12, 2004 Kina Chuturkova, Partner at Borislav Boyanov & Co., participated in the European/Middle Eastern/Africa Regional Meeting of TerraLex hosted by Advokatfirman Sodermark in Stockholm, Sweden. The importance of client care, as well as some aspects of the recent EU expansion and the international arbitration in Europe were discussed. Mrs. Chuturkova took part in a session on the accession of the ten new EU member states and made an overview of Borislav Boyanov & Co.’s activity related to Bulgaria’s expected accession to the EU on January 1, 2007.

Wednesday, June 23rd, 2004

On June 18, 2004 Parliament amended the Labour Code (the “Code”) to be effective as of August 1, 2004. The amendments may be summarized as follows:

• the Code fixes the mandatory content of an individual labour contract which must include, among others, information on the working place, the date of signing and the date on which performance begins, the duration of the contract, the basic and additional remunerations, the termination notice period which should be the same for both parties, and the duration of the working week or day;

• in case of increased working time, the Code fixes the total duration of the working week at up to 48 hours, and up to 40 hours for employees working under a reduced working time;

• in case of summed working time, the Code fixes the maximum duration of the working week at 56 hours , and

• if the employer is not able to pay the whole amount of the agreed remuneration on time, the Code requires the employer to pay at least 60 percent of the employee’s gross salary but not less than the minimum working salary for the state – in contrast with the current regime where the employer is obliged to pay only an amount equivalent to the minimum working salary for the state.

The other amendments to the Code are related to the regime on leaves, mass dismissal procedures, employer’s obligations connected with the payment of labour remuneration, etc.

Changes in the Labor Code

Wednesday, June 23rd, 2004

On June 18, 2004 Parliament amended the Labor Code (the “Code”) to be effective as of August 1, 2004. The amendments may be summarized as follows:

• the Code fixes the mandatory content of an individual labor contract which must include, among others, information on the working place, the date of signing and the date on which performance begins, the duration of the contract, the basic and additional remunerations, the termination notice period which should be the same for both parties, and the duration of the working week or day;

• in case of increased working time, the Code fixes the total duration of the working week at up to 48 hours, and up to 40 hours for employees working under a reduced working time;

• in case of summed working time, the Code fixes the maximum duration of the working week at 56 hours , and

• if the employer is not able to pay the whole amount of the agreed remuneration on time, the Code requires the employer to pay at least 60 percent of the employee’s gross salary but not less than the minimum working salary for the state – in contrast with the current regime where the employer is obliged to pay only an amount equivalent to the minimum working salary for the state.

The other amendments to the Code are related to the regime on leaves, mass dismissal procedures, employer’s obligations connected with the payment of labor remuneration, etc.

Wednesday, June 23rd, 2004

On June 18, 2004 Parliament amended the Labor Code (the “Code”) to be effective as of August 1, 2004. The amendments may be summarized as follows:

• the Code fixes the mandatory content of an individual labor contract which must include, among others, information on the working place, the date of signing and the date on which performance begins, the duration of the contract, the basic and additional remunerations, the termination notice period which should be the same for both parties, and the duration of the working week or day;

• in case of increased working time, the Code fixes the total duration of the working week at up to 48 hours, and up to 40 hours for employees working under a reduced working time;

• in case of summed working time, the Code fixes the maximum duration of the working week at 56 hours , and

• if the employer is not able to pay the whole amount of the agreed remuneration on time, the Code requires the employer to pay at least 60 percent of the employee’s gross salary but not less than the minimum working salary for the state – in contrast with the current regime where the employer is obliged to pay only an amount equivalent to the minimum working salary for the state.

The other amendments to the Code are related to the regime on leaves, mass dismissal procedures, employer’s obligations connected with the payment of labor remuneration, etc.

Bulgarian Telecom Sale Completed

Friday, June 11th, 2004

On June 11, 2004 the privatization of 65% of the equity of the Bulgarian Telecommunications Company (BTC) was successfully completed. The buyer, Viva Ventures Holding GmbH, is a vehicle of the US investment fund Advent International. In addition to the initial consideration of EUR 280 million (consisting of EUR 230 million – purchase price for approx. 60% of the shares of BTC and EUR 50 million for a capital increase), the transaction involves binding investment commitments of the buyer of EUR 400, as well as additional EUR 300 million – non-binding investment commitments. In connection with the privatization BTC was also awarded a GSM licence, which is the third GSM licence in Bulgaria (first issued in 1994 and the second in 2001). The attempts to privatize BTC started yet in 1996. The current privatization started in 2001 and was subject to a number of legal challenges.

Borislav Boyanov & Co. advised a syndicate of major international banks (including EBRD) and institutional investors financing the acquisition of BTC by Viva. In connection with the closing Borislav Boyanov & Co. provided competition law advice both through its Sofia office and its affiliated office in Brussels.

Project Supported by Borislav Boyanov & Co. Awarded No.1 Investment Project in the Energy Sector for 2003

Tuesday, June 8th, 2004

The Bulgarian Energy Forum awarded the Italian energy giant ENEL with “Investor No. 1 in the Energy of Bulgaria for 2003”. The reward is given as recognition for the significance of the project for Bulgaria, as well as for the financial commitment of the investor. In April 2003 the Italian company became a major shareholder in the joint-venture “Maritza East III” – a project evaluated to EUR 600,000,000 – together with the National Electric Company and the American “Entergy”.

BTC Awarded the Third GSM Licence

Tuesday, June 8th, 2004

The Bulgarian Telecommunications Regulation Commission (“TRC”) awarded on June 7, 2004 the third local GSM licence to the telecom carrier Bulgarian Telecommunications Company (“BTC”).

At the end of May the Commission on Protection of Competition okayed the acquisition of 65 percent stake in BTC by Viva Ventures in an important step towards closing the deal. The commission set no conditions on main business activities concentration, but set additional requirements for BTC activities as an operator after the deal is wrapped up.

The Minister of Transport and Communications Nikolay Vassilev was hopeful that after the TRC decision the telecom’s privatization shall be completed within a week, as the issue on the third GSM licence was one of the material conditions for the finalization of the sale deal with Viva Ventures.

Bulgaria Becomes More Attractive to the Investors

Wednesday, June 2nd, 2004

Bulgaria proved to be an attractive place to foreign investments as it has been ranked at the well reputed eighth place among the European countries. This fact, based on EU research information, as well as a 13-percent increase of the foreign investments for the Q1 was recently announced by the Bulgarian Deputy Prime Minister and Economy Minister Lidya Shuleva.

Privatization Strategy of the Bulgaria Air May be Changed

Wednesday, June 2nd, 2004

The Minister of Transport Nikolay Vassilev stated that some modifications in the privatization strategy of the Bulgaria’s flag carries should be made. The changes, necessitated by the one-year lap since the adoption of the previous strategy and mainly by the improvement of the financial condition of Bulgaria Air, are expected to affect significantly the objectives of the strategy.

As recently envisaged, the company leased two Boeings 737 from the German Deutsche Structured Finance GmbH, advised on the deal by Borislav Boyanov & Co.