This case study is based on the official public information on the case, given by OLAF and the competent authorities in Romania and Bulgaria . It aims to demonstrate the actions of the Bulgarian authorities to amend national legislation in order to assist the investigations of the European Anti-Fraud Office (OLAF) during a large scale international legislation.
OLAF's assistance to the Romanian Anti-Corruption Directorate (DNA) and the Romanian Anti-Fraud Department - DLAF, has included the conducting of on-the-spot checks in Romania and Bulgaria as well as making enquiries with the judicial authorities in Cyprus, receiving the investigative assistance of the Carabinieri in Italy and also the receipt of detailed information from the administrative authorities in Sweden and Germany.
In Bulgaria, the competent authorities provided OLAF with the relevant information for their investigation into the tax and insurance data of “Company X”. However, under article 74 of the Tax-insurance procedure code (DOPK), such information can only bе issued by the National Revenue Agency (NRA) to specific entities, provided for by law, such as the President of Bulgaria, the Customs authorities, Minister of Finance and others.
In this case, the Bulgarian Anti-Fraud Coordination Service (AFCOS Bulgaria within Ministry of Interior) was obligated to assist the investigators of the European Anti-Fraud Office in accessing the investigative information.
However, neither OLAF, nor AFCOS had the right to access to such information, according to Bulgarian legislation. From legal point of view, the obtaining of tax and insurance information for the Bulgarian “Company X” was possible through two ways:
1. If either AFCOS or OLAF are provided for by the law as being entitled to receive such sensitive information from NRA (which they were not);
2. To request the voluntary consent of the perpetrator/fraudster.
In this case, the Bulgarian authorities did the following to obtain the necessary information:
1. They secured the voluntary consent (through a consent declaration) from the owner of the Bulgarian “Company X”, to assist with the AFCOS investigation,
2. The National Revenue Agency then provided further information to AFCOS and to OLAF.
3. AFCOS and NRA initiated amendments in the Tax-Insurance Procedure Code (DOPK).
With the amendments of 2015, 2016 and 2017 the Tax-Insurance Procedure Code (DOPK) stipulates that:
Art. 74, par. 1 Access to tax and insurance information can only be given to:
par. 4to the Director General of the European Anti-Fraud office or to a designated person by him, as well as to the Director of the Bulgarian Anti-Fraud Coordination Service (Directorate “Protection of the Financial Interests of the European Union within the Ministry of Interior”) for the purposes of an open investigation.
Romanian anti-corruption prosecutors conducted searches in various locations throughout Romania and Company X was prosecuted by the Romanian authorities. In Bulgaria, APIA brought a case before the Supreme Court of Cassation, which concluded that the Bulgarian Bank has to pay the Bank Guarantee. A judicial enforcer seized the accounts of the Bank to use the bank guarantee to repay APIA. However, the EU funds have still not been recovered. An irregularity report was sent by the Romanian authorities, through IMS, to OLAF.
For the Bulgarian side this case demonstrated the willingness of the authorities to render the necessary cooperation during an investigation of fraud by OLAF, including by promptly amending the national legislation.