EU-Report Accession Bulgaria

Ability to assume the obligations of membership

Chapter 1: Free movement of goods

Further progress is needed to modify the framework law on technical requirements implementing New and Global Approach principles to ensure it is in line with the acquis. Work to reinforce horizontal administrative infrastructure has continued. Concerning separation of standardisation and certification functions, some progress has been made in restructuring following the amendments to the Law on Standardisation but certification activities are still not adequately segregated from accreditation so the Action Plan objective has not been fully met. Alignment of traditional sectoral legislation has progressed well. Further work has been carried out to prepare the administration and food operators for EC principles of food safety through the adoption of several ordinances. An amended public procurement act is in force but some further changes are still required to ensure full compatibility with the acquis and a public procurement agency still needs to be established to ensure transparent public procurement procedures at central and regional level. The screening of legislation in the non-harmonised area to ensure that it is in compliance with Articles 28-30 of the EC Treaty is on going. Overall, Accession Partnership priorities in the area of free movement of goods have been partially met. Implementation of the measures under the Action Plan is largely on track.

Chapter 2: Free movement of persons

Bulgaria has continued to pursue alignment of mutual recognition of professional qualifications and diplomas and to introduce required administrative structures, education and training programmes. Implementation of the measure under the Action Plan to establish a unit for mutual recognition in the medical professions has started. Overall, Accession Partnership priorities in the area of free movement of persons have been partially met. Implementation of the measure under the Action Plan is largely on track.

Chapter 3: Freedom to provide services

Concerning reinforcement of supervision of financial services, a Consultative Council for Financial Sector Supervision was set up. The banking supervision structure is well equipped but further strengthening is needed in the insurance supervision area and pension funds. Implementation of the measures under the Action Plan on financial services supervision is on track. This priority has been partially met. National legislation has been adopted on data protection and an independent public supervisory authority responsible for monitoring the correct application of Data Protection provisions has been created, so this priority has been met and the implementation of the Action Plan is on schedule. The Accession Partnership priorities in the area of freedom to provide services have been largely met. Implementation of the measures under the Action Plan appears to be on track.

Chapter 4: Free movement of capital

Further steps to prevent use of financial system for money laundering have been taken through the new law on measures against money laundering. Changes have been made to transform the Bureau of Financial Intelligence into an Agency but it has yet to be seen whether this strengthens sufficiently its capacity to deal with money laundering. Instructions on co-operation with other relevant bodies have been adopted. Further steps are needed to complete alignment of legislation with the Second Directive against money laundering and to ensure compliance with the Recommendations of the Financial Action Task Force. Overall, Accession Partnership priorities in the area of free movement of capital have been partially met. Implementation of the measures under the Action Plan appears to be on track.

Chapter 5: Company law

Further steps have been taken to upgrade accounting and auditing standards and practices, and to further align the regulatory framework with the acquis but further amendments are needed for legislation to be fully aligned with the acquis. Concerning the need to enhance the enforcement of industrial and intellectual property rights, further efforts are still required, in particular as regards strengthening border controls and training of law enforcement officials. In line with the Action Plan, the strengthening of the administrative capacity of the special unit of customs police in the field of intellectual and industrial property rights protection has begun but still needs to be reinforced. The Accession Partnership priorities in the area of company law have been partially met. Implementation of the measures under the Action Plan appears to be on track.

Chapter 6: Competition policy

Further steps have been taken to complete the legislative framework in both anti-trust and state aid. Concerning strengthening of administrative capacity, the Commission for the Protection of Competition (CPC) has continued to build up its enforcement record in anti-trust but this is still at an early stage for state aid control so further work is needed to ensure full enforcement of anti-trust and state aid rules. A state aid inventory and an annual state aid report exist. The state aid report for 2001 follows the methodology and presentation of the ``Survey on State Aid in the European Union''. Further measures need to be taken to increase awareness of anti-trust and state aid rules among market participants and aid granters and training of the judiciary in anti-trust and state aid matters needs to be intensified. As foreseen in the Action Plan, on anti-trust, steps are being taken to enhance the theoretical knowledge and the practical training of CPC officials in conformity with the acquis. These include study visits, supply of computer hard and software. On state aid, some progress has been made on staff training. Overall, Accession Partnership priorities in the area of competition policy have been partially met. Implementation of the measures under the Action Plan appears to be on track.

Chapter 7: Agriculture

Bulgaria has taken some steps to prepare the administrative structures needed for EC funded rural development programmes, and to start to prepare the agricultural administration for the practical implementation and enforcement of the management mechanisms of the Common Agricultural Policy. Some further progress was made to lay the foundations for the Integrated Administration and Control System. Bulgaria has not yet established a Paying Agency for the management of Common Agricultural Policy funds. Concerning the implementation and enforcement of veterinary and phytosanitary legislation and food safety legislation, further progress was made on adoption of legislation but much remains to be done on enforcement. Work is underway to create the necessary conditions for the emergence and strengthening of efficient land, labour and capital markets in the rural and agricultural sectors; however, considerable further efforts will be necessary to ensure the development of efficient markets. Bulgaria needs to continue the upgrading of food processing establishments so that they are in a position to respect EC food safety standards. It also needs to continue the reinforcement of the food control administration. Bulgaria needs to undertake further work to prepare the vineyard register. Progress has continued on alignment of veterinary and phytosanitary legislation and to implement the programme to upgrade inspection arrangements, in particular at future external borders. Bulgaria made progress on implementation and enforcement, including testing of animal diseases, in particular transmissible spongiform encephalitis. However, it needs to ensure that this is fully in accordance with the acquis. Overall, Accession Partnership priorities in the area of agriculture have been partially met. Implementation of the measures under the Action Plan appears to be on track.

Chapter 8: Fisheries

Further progress has been made to complete the establishment of the adequate organisation, adequate institutional resources and equipment relating to inspection and controls at central and regional levels. The staff of the National Agency for Fisheries and Aquaculture (NAFA), established in the Ministry of Agriculture and Forestry, has been increased to 156. The fishing vessel register has been finalised but further steps are needed to ensure this is in full compliance with EC requirements. Overall, Accession Partnership priorities in the area of fisheries have been met. Implementation of the measures under the Action Plan is largely on track.

Chapter 9: Transport policy

Bulgaria has continued to make progress in legal alignment in the road transport sector. Further steps to reinforce administrative capacity in the road and inland waterway sector are needed. Progress has been made on vehicle taxation and on road user charging. Efforts to improve the screening of entry to the profession are needed. Further measures are required to prepare for the adaptation of the fleet to technical and safety requirements. Further progress has been made to continue legal alignment and reinforce administrative capacity in railway transport with a view to the implementation of the revised railway acquis. Concerning the pursuit of the restructuring of Bulgarian railways, the functional separation of infrastructure management from rail transport operations of the Bulgarian Railways Company has been completed. However, there have been delays in the adoption of necessary amendments in the area of maritime transport legislation and in strengthening the administrative capacity to improve the Flag State performance in the field of maritime safety. Due to this, Bulgaria has not yet achieved its objective of being removed from the Black List of the Paris MOU. Overall, priorities in the area of road and rail transport have been largely met with the exception of maritime transport. Implementation of the measures under the Action Plan is delayed.

Chapter 10: Taxation

Bulgaria has continued alignment of VAT legislation but further alignments are still needed in particular on special schemes. Further alignments have been made on legislation on excise duties, with particular regard to the applied rates, but further increases will be needed to reach the minimum levels required by the acquis. A review of legislation to ensure compliance with the Code of Conduct for Business Taxation is in progress. Little progress has been made to continue to modernise and strengthen tax administration to ensure laws are effectively implemented and enforced and significant further efforts are needed. Bulgaria needs in particular to ensure that VAT refunds are paid in an efficient and timely way. Further efforts should also be made in the area of administrative co-operation and mutual assistance. Little has been done to develop IT systems so as to allow for the exchange of electronic data with Member States. Bulgaria has to implement the Holding and Movements Directive concerning excisable products. The Accession Partnership priorities in the field of taxation have been partially met. Implementation of the measures under the Action Plan is largely on track.

Chapter 12: Statistics

Bulgaria has made further progress to improve quality and coverage of statistics. It will need to pursue efforts to ensure adequate resources are available to further strengthen statistical capacities, including at regional level. The Accession Partnership priority in the area of statistics has been partially met. Implementation of the measures in the Action Plan appears to be on track.

Chapter 13: Employment and social policy

Alignment of the social acquis has continued but with little progress on adoption of legislation in the field of equal treatment for women and men and against discrimination. The General Labour Inspectorate has been strengthened for its role in the enforcement of the acquis in the area of health and safety at work. Work on alignment of legislative framework for the acquis on public health has continued and a national programme for the restriction of smoking been adopted. Further efforts are necessary to accelerate the development of an information system for surveillance and control of communicable diseases and health monitoring and information. Some progress has been made to support social partners' capacity-building efforts through the adoption of the Employment Protection Act. In line with the Action Plan, a National Institute for Conciliation and an Economic and Social Council were established. However, further efforts will be needed to prepare for the social partners' future role in the elaboration and implementation of EC employment and social policy, including the European Social Fund. Particular efforts will be needed to further improve autonomous bipartite social dialogue. Concerning the preparation of a national strategy, including data collection, with a view to future participation in the European strategy on social inclusion, this priority has not yet been met. Overall, Accession Partnership priorities in the area of social policy have only been met to a limited extent. Implementation of the measures under the Action Plan is largely on track.

Chapter 14: Energy

Bulgaria has adopted a new energy strategy. However, whilst this identified gaps in energy efficiency, it does not yet define an active policy to improve this or revise energy demand forecasts on the basis of more realistic growth and energy intensity scenarios. Bulgaria has confirmed its commitment made in the Understanding of 1999 to close down definitively Units 1 and 2 of the Kozloduy Nuclear Power Plant before the year 2003. A decision on closure of Units 3 and 4, due to be decided in 2002, is still outstanding. Bulgaria has accepted the recommendations contained in the Council report on ``Nuclear Safety in the Context of Enlargement'' with due regard to the priorities assigned in the report and is addressing most of these adequately. However Bulgaria should devote further attention to three recommendations: clarifying the legal status of the safety analysis, implementing the new Law on the Safe Use of Nuclear Energy as soon as possible and giving special attention to the funding of the radioactive waste storage programme. The independence of the national regulatory authority for nuclear energy has been formally strengthened as the Committee for the Use of Atomic Energy for Peaceful Purposes (CUAEPP) has been transformed into a Nuclear Regulatory Agency. Secondary regulations still need to be developed and enforced for full implementation of the law. Bulgaria has continued its efforts to ensure a high level of operational nuclear safety at the Kozloduy Nuclear Power Plant. It is too early to evaluate the decommissioning phase of Units 1-4 as this has not yet started. A framework law on oil stocks has not yet been adopted but progress has been made as the level of oil stocks is no longer a state secret. The Action Plan deadline for adoption of the law by July 2002 was not met. It is important that Bulgaria begin to progressively build up its oil stocks as required by the acquis. The new Law on Safe Use of Nuclear Energy also foresees improved management of radioactive waste. Little progress has been made towards starting to implement energy efficiency measures and step up the use of renewable energy, or to ensure that the Energy Efficiency Agency is adequately resourced. Amendments to the energy and energy efficiency law do lay the basis for legislative alignment as regards market opening. Further steps are needed to put in place transparent market rules with a clear schedule for opening the market to competition. The role of the State Energy Regulatory Commission has been enhanced through the new law but its capacity and independence need further strengthening. Further progress has been made to restructure the solid fuels sector through sales of coal mines and liquidation of unprofitable mines. Preparations for participation in the internal market for electricity and for natural gas have progressed through the adoption of the new Energy and Energy Efficiency Law, which includes provisions to allow for market opening. Overall, Accession Partnership priorities in the area of energy have been partially met. Implementation of the measures under the Action Plan is largely on track.

Chapter 15: Industrial policy

Bulgaria has made further progress to develop and implement a market-oriented competitiveness strategy, which identifies, inter alia, sectors seen as particularly promising. This Accession Partnership priority has been largely met.

Chapter 19: Telecommunications and information technologies

Through amendments to the telecommunications law, further progress has been made towards completing the transposition of the acquis and to ensure independence of the regulatory bodies from operational activities and strengthen their capacity in preparation for planned full liberalisation of these sectors by 1 January 2003. However, implementation capacity of the telecommunications regulator and particularly the regulator for postal services need to be strengthened. The Accession Partnership priority in the area of telecommunications has been partially met. Implementation of the measures under the Action Plan is largely on track.

Chapter 20: Culture and audio-visual policy

Further progress has been made towards strengthening the administrative capacity of the national regulatory body in the field of broadcasting, however further attention will need to be paid to this. To meet the Action Plan priority, steps have been taken to strengthen the administrative capacity and increase the budget of this body but more efforts are needed to ensure it can carry out its monitoring role effectively and ensure its independence. This Accession Partnership priority has been partly met. Progress towards implementation of the Action Plan priorities is largely on track.

Chapter 21: Regional policy and co-ordination of structural instruments

Considerable further efforts are still needed to bring administrative capacity up to the level required in key ministries, particularly at the central level, to design strategies and to implement and evaluate projects for regional development and economic and social cohesion, financed by EC and national funds. As mentioned in the Action Plan, a strategy paper to clarify institutional arrangements for managing structural and cohesion funds after accession was adopted but this was done in May 2002, several months later than expected. Bulgaria has not yet prepared a coherent development plan as required by the Structural Funds regulations. Progress has been made to clarify the proposed institutional arrangements for managing structural and cohesion funds after accession, but further efforts need to be made including on appropriate control, monitoring and evaluation mechanisms and the necessary administrative structures consistent with these arrangements need to be built. Much needs to be done to prepare to comply with basic financial management and control provisions as laid down by the respective regulations of the Structural Funds. Overall, the Accession Partnership priorities in the area of regional policy have been met to a limited extent. There were some delays in meeting the time schedule set in the Action Plan.

Chapter 22: Environment

Bulgaria has made progress to continue transposition of the acquis but the delay in the adoption of the Environmental Protection Act slowed progress on environmental impact assessment and integrated industrial pollution prevention and control. Further efforts are needed to continue implementation of the acquis with particular emphasis on environmental impact assessment, air quality, waste management, water quality, nature protection, industrial pollution control and risk management and radiation protection. Equally, efforts to continue preparation and development of directive-specific implementation plans, including financing plans, require close attention. Concerning strengthening administrative, monitoring and enforcement capacity at national and regional levels, whilst decisions have been taken to strengthen the administrative capacity of the Ministry of Environment and Water as well as Regional Inspectorates, these need now to be matched by appropriate budgetary provisions. Although steps have been taken in integrating environmental protection requirements into all sectoral policies, continuing attention to this is needed at both national and local level. Overall, Accession Partnership priorities in the area of the environment have been met to a limited extent. Implementation of the measures under the Action Plan is largely on track.

Chapter 23: Consumers and health protection

Little further progress has been made to continue alignment of legislation and to ensure effective implementation of the Consumer Protection Act. Further attention needs to be paid in particular to development of an independent and efficient market surveillance mechanism. Overall, Accession Partnership priorities in the area of consumer protection have been only partially met. Implementation of the measures under the Action Plan appears to be on track.

Chapter 24: Co-operation in the fields of justice and home affairs

Bulgaria has submitted a Schengen Action Plan. Further steps have been taken to upgrade and modernise infrastructure at the future EU external borders but major efforts are still needed to complete this. A new law on asylum has been adopted but administrative capacity needs to be strengthened and resources provided to ensure its proper implementation. Limited progress has been made to improve the internal cooperation within the police and with other law enforcement agencies and with the judiciary in particular to strengthen capacities to fight organised crime. Bulgaria still needs to update and implement an integrated strategy for the fight against organised crime, from prevention to prosecution, in collaboration between the Ministry of Justice, the Ministry of Interior and any other concerned agency. The strategy to combat organised crime has not yet been adopted, thus the target in the Action Plan of adoption by end May 2002 has not been met. Bulgaria has developed a national drugs strategy and now needs to strengthen the administrative capacity of and the co-ordination among bodies involved in its implementation. Further steps are still needed to ensure the implementation of Community instruments in the area of judicial co-operation in civil matters. Overall, Accession Partnership priorities in the area of justice and home affairs have been partially met. With the exception of the adoption of the strategy on combating organised crime, implementation of the measures under the Action Plan is largely on track.

Chapter 25: Customs Union

Concerning implementation of the Bulgarian customs code and its implementing provisions, some progress has been made but more is needed. A major reform strategy has commenced to support work to guarantee the stability and strengthen the administrative and operational capacity of the customs administration to enable it to enforce legislation and improve co-operation with other law enforcement bodies. As mentioned in the Action Plan, a Customs Consultative Council has been established. Work on the urgent priority of implementing the IT strategy of the Bulgarian customs administration is ongoing but has fallen behind schedule. Work on implementation of the customs ethics policy is ongoing and this is now also covered in the National AntiCorruption Strategy. Overall, Accession Partnership priorities in the area of customs have only been partially met. Implementation of the measures under the Action Plan is largely on track.

Chapter 28: Financial control

Substantial progress has been made to amend the Public Internal Financial Control Act to establish functional independence of the PIFC Agency and to bring ex ante financial control under the responsibility of the spending centre's manager. Further progress has been made to implement the new legislative framework on public internal financial control and strengthen the administrative capacity and the functional independence of the relevant institutions. Bulgaria has started to work on the priority of setting the framework for systems based and performance audits or to develop a culture of managerial accountability. The first steps towards establishment of a sustainable training facility for controllers and auditors have been made in line with the Action Plan measure on training. Some progress has been made to develop coherent and comprehensive standards for external audit supported by appropriate methodology and manuals. Steps have been taken to strengthen the capacity of the National Audit Office, in particular through adoption of a law, which completes the legislative framework for external audit. A contact point for the protection of the Communities' financial interests for the start of effective co-operation with OLAF has not yet been designated. Bulgaria has made some progress to strengthen the fight against fraud and efforts to ensure the correct use, control, monitoring and evaluation of EC pre-accession funding but needs continue and reinforce these. Overall, Accession Partnership priorities in the area of financial control have been partially met. Implementation of the measures under the Action Plan is largely on track.

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