EU-Report Accession Bulgaria

Chapter 5: Company law

Since last year's Regular Report, Bulgaria has continued to make progress in the area of company law and the legal framework for protection of intellectual and industrial property rights, but enforcement remains weak, especially at borders.

Regarding company law as such no major developments can be reported.

With regard to accounting, the new Law on accounting entered into force in January 2002. Through the Law, the provisions of the Fourth and the Seventh EC Directives on accountancy were transposed into Bulgarian national legislation. The Law on independent financial audit entered into force in January 2002. It introduces the requirements of the Eighth EC Directive.

Concerning administrative capacity, the Institute for certified public accountants has intensified its activities in line with its new competence for licensing and controlling the quality of auditors and auditing companies. With the entry into force of the new Law on accounting and the Law on independent financial audit, the Institute licensed around 540 certified auditors.

In the field of intellectual and industrial property rights, in January 2002, the Parliament adopted a Law on ratification of the European Patent Convention and of the Act revising the European Patent Convention. Bulgaria has agreed to the EC proposal relating to industrial property rights for pharmaceuticals products and Community Trademark.

As regards administrative capacity, the Ministry of Culture and the Patent Office have processed a substantial number of applications for registration of copyrights and of industrial property rights under the Law on copyrights and related rights, and the Decree on control over the usage of copyrights and licensing of CD productions, as well as under the Patent Law.

Legislative work is ongoing to harmonise Bulgarian legislation with the requirements of the Rome Convention on the law applicable to contractual obligations.

Overall assessment

As regards company law, several of the EC directives in this field have already been incorporated into Bulgarian national law. However, while preparatory work is under way, legislation still needs to be brought fully into line with elements of the acquis, especially on acquisitions, mergers and divisions of companies.

The court system has gained experience in applying commercial law. Progress is observed in the commercial register proceedings. Register cases are handled within 3 to 7 days. In many district courts, there is a system for electronic processing and maintenance of the commercial register. Since there have not been recent changes in the legislation related to the registration of commercial agents, the courts have established relatively unified practice in the area. There are almost no cases of appeal on a registration procedure. Despite this progress, there are problems due to the fact that the original commercial register is kept on paper. Sometimes there are delays in registering factual changes even though a case has been dealt with in court. The court administration sometimes lacks the necessary expertise, and relevant training is not provided.

Whilst Bulgaria's legislation is to a large extent in line with the acquis on accounting, some amendments are still needed in order to reach full compliance.

The laws on intellectual and industrial property protection are largely in line with the acquis. Bulgaria has not implemented legislation on the sui generis protection of databases.

Furthermore, as regards enforcement of intellectual and industrial property rights (IPR), whilst efforts have been made, high levels of pirate software and counterfeiting still give cause for concern. According to industry information, pirate software and CD levels are respectively at 75% and 75-80%. Bulgaria is no longer a centre for the manufacture of pirate products, and import is the main source of such products on the Bulgarian market. Particular efforts are needed to enhance enforcement of border controls and to train law enforcement bodies and the judiciary to handle IPR matters.

An action plan exists concerning the implementation of the Regulation replacing the Brussels Convention on jurisdiction and enforcement of judgements in civil and commercial matters. Legislative work is well advanced as regards the implementation of the Rome Convention on the law applicable to contractual obligations (see also Chapter 24 ­ Co-operation in the fields of justice and home affairs).

Conclusion

In its 1997 Opinion, the Commission concluded that special efforts were necessary to improve the protection of intellectual and industrial property rights. It concluded that problems existed for the implementation of company law, due to insufficient knowledge and experience in the judiciary of company and commercial law issues, in particular company insolvency proceedings. Law enforcement was also hampered by deficiencies in laws relating to privatisation and concessions. The Commission added that as regards accounting and auditing, a high degree of conformity with the Directives had already been achieved but the profession's compliance with the legislation needed to improve. Major efforts were needed to ensure the practical application of the existing legislation.

Since the Opinion, Bulgaria has made good legislative progress in the field of company law, but efforts are still required to reach full alignment with the acquis and ensure implementation

Negotiations in this chapter are provisionally closed. Bulgaria has not requested any transitional arrangements in this area and has agreed to the proposal put forward by the EU relating to industrial property rights for pharmaceutical products and Community Trademark. Bulgaria is generally meeting the commitments it made in the accession negotiations in this field.

Bulgaria should focus further efforts on full alignment with the acquis, intensifying measures to combat piracy and counterfeiting in particular through strengthening border controls and improving co-ordination between the customs, police and judiciary on enforcement of intellectual and industrial property rights.

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