Archive for April, 2005

Bulgaria Signed the EU Accession Treaty

Tuesday, April 26th, 2005

Bulgaria and Romania signed the Accession Treaty to the European Union at the forum of the EU ministers of foreign affairs held on April 25, 2005 in Luxembourg. The signing will be followed by ratification procedures in all current EU Member States that will formalize the two accession countries’ membership in the Union as of January 1, 2007. The Bulgarian Parliament is to ratify the Accession Treaty on May 12, 2005. The accession of Bulgaria and Romania will complete the fifth, biggest enlargement in the EU history.

The USA and Bulgaria to Begin Negotiations on Entry into a Bilateral Income Tax Treaty

Friday, April 22nd, 2005

Following the official visit of the Bulgarian Finance Minister Milen Velchev in Washington D.C., the United States Department of Treasury announced in a press release of April 21, 2005 that the United States and Bulgaria intend to begin negotiations on entry into a bilateral income tax treaty. The first round of negotiations is expected to take place in the autumn of 2005. The treaty would be the first tax treaty between the two countries.

Amendments to the Regulation on Implementation of the Investment Encouragement Act

Thursday, April 21st, 2005

The Government amended the Regulation on Implementation of the Investment Encouragement Act. The amendments, effective as of April 19, 2005, decrease the amount thresholds applicable to the three classes of investments entitled to preferential treatment. The amounts are lowered as follows: Class 1 – from BGN 100 mln. to BGN 70 mln., Class 2 – from BGN 50-100 mln. to BGN 40-70 mln., and Class 3 – from BGN 10-50 mln. to BGN 10-40 mln. Investors will be required to demonstrate that they have sufficient financial resources to cover the above thresholds by providing relevant loan or financial leasing agreements, bank guarantees, or other documents evidencing sufficiency of funding. The candidates for Class 1 investment status should (i) not be insolvent or in a liquidation procedure, (ii) provide no less than 25 percent of the funding (and that participation should not contain any state aid), (iii) provide evidence for the compliance of the project with the national environmental requirements, and (iv) obtain project and technical documentation and plans for the planned technical infrastructure which should be prepared by the competent Bulgarian ministry with functions in the particular sector of industry.

General Parliamentary Elections Scheduled for June 25, 2005

Friday, April 15th, 2005

On April 13, 2005, the President of the Republic of Bulgaria issued a Decree setting June 25, 2005 as the date on which the general elections for the National Assembly will be held. Pursuant to the Bulgarian elections law only political parties or coalitions taking 4 percent or more of the votes shall be represented in the Parliament. According to the recent polls currently 6 parties or coalitions have chance to overcome the 4 percent barrier. It is largely expected that in all possible scenarios the next government will be in the form of a coalition of several parties – either center-right or center-left.

Bulgaria and Romania will sign the European Union Accession Treaty on April 25, 2005

Friday, April 15th, 2005

On April 13, 2005, the European Parliament approved the entry of Romania and Bulgaria into the EU. On the accession of Bulgaria, there were 522 votes in favour, 70 against and 69 abstentions. At the very last moment Parliament forced the Council into restoring its budgetary rights as regards the funding to be allocated to Romania and Bulgaria until 2009, which sums had been laid down in the Accession Treaty. The actual accession is scheduled to take place on January 1, 2007. In a political resolution accompanying the assent for Bulgaria, the European Parliament said that the country had made excellent progress so far, but noted a number of steps its government still needed to take – adoption of a new penal code for fighting corruption more effectively and greater efforts to combat organised crime. In an official statement on the occasion, the MEPs welcomed Bulgaria’s economic performance and shared their expectation that the Government would re-run the auction for state-owned tobacco monopoly Bulgartabac subsidiaries.

The Government Approved the Construction of the Belene Nuclear Power Plant

Friday, April 8th, 2005

On April 7, 2005, the Council of Ministers approved the proposal of the Minister of Energy and Energy Resources for the construction of a second nuclear power plant (NPP) in Bulgaria on the site of Belene. The project capacity of the new NPP is 2,000 MWe. The construction works are expected to commence by the end of 2005 and to be completed in 2011. Announced projected investments are estimated at €2.4 bln although real costs may differ significantly since the project is in its early stages and its structure has not been finalized. According to the Minister of Energy and Energy Resources the international tender for general contractor for the construction works will be announced within the next 30 days under “turn key” terms. The tender will be governed by the rules of the Public Procurement Act. Governmental guarantee is envisaged for the financing of the project but no long-term power purchase agreement will be signed. It is planned that the project will take the form of a public private partnership where the Bulgarian State will hold at least 51%.