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Registration reform in Bulgaria: an update
 
The necessity of reform

The development of market economy and establishment of democratic rule of law in Bulgaria require the creation of a safe and transparent environment for setting up and conducting business, as well as proper conclusion and carrying out of contracts. A precondition to achieving this objective is the establishment of a modern centralized electronic system of official registers that is able to provide reliable, timely and legally valid information on legal persons and real estate to the public and private sector. However, the present registration system in the country, consisting primarily of decentralized, paper based registers, reveals a number of shortcomings, which make it ineffective, unreliable, short of transparency, and a major source generating corruption within the judiciary.

CSD’s contribution

In early 2001 the Center for the Study of Democracy (CSD) started developing a concept for reforming Bulgarian registration system. A Registration Reform Task Force was set up, consisting of prominent Bulgarian jurists experienced in the area of civil and commercial law. The Task Force carried out a comprehensive research of the present situation with official registers in Bulgaria as well as the best practices implemented in other countries and in early 2003 prepared a report Opportunities for Establishment of Central Register of Legal Persons and Electronic Registries Center in Bulgaria. The report reflects the recommendations and suggestions made in the process of its preparation by Bulgarian and foreign experts, governmental institutions, non-governmental organizations, and the business community.

According to the report the reform should pursue three main objectives: establishment of administrative procedures of registration, centralization of existing registers and transformation of existing paper-based registration systems into electronic ones. The report also offers analysis of the present situation of official registers in Bulgaria, a review of the foreign experience in this area, a complete set of proposals for reform together with a stage-by-stage plan for its implementation, as well as a model organizational structure of the Electronic Registries Center.

Position of the Government

Even since the early preparation stages of the registration reform proposal the Task Force has been closely cooperating with the relevant governmental institutions.

  • In August 2002 the Minister of Justice together with members of the Task Force visited Norway to study the Norwegian experience in developing central electronic registers;

  • In September 2002 representatives of the Ministry of Justice took part in a round table discussion on registration reform, organized by CSD, and expressed their support for the implementation of the proposed reform;

  • In December 2002 the issues of the registration reform were discussed on a joint coordination meeting at the Ministry of Economy with the participation of the Deputy Prime Minister and Minister of Economy, the Minister of Finance, the Secretary General of the Ministry of Justice, the Secretary General of the Ministry of Finance, and other representatives of the respective Ministries as well as CSD senior staff.

  • In May 2003 a second coordination meeting took place with the participation of the Deputy Prime Minister and Minister of Economy, the Minister of Justice, the Secretary General of the Ministry of Finance and CSD senior staff.


Recent developments: two governmental decisions on registration reform

On March 11, 2004, the Council of Ministers adopted a decision for approving the Plan for Implementation of the E-Government Strategy (Decision on point 37 from the sitting of the Council of Ministers of March 11, 2004, included in the Record of Proceedings No.10 of March 11, 2004). Based on a proposal by CSD the plan incorporated a separate section on reforming the registration system in Bulgaria, describing the main stages of the process, the responsible governmental institutions and the respective deadlines for their implementation. The plan envisages the following stages:

  • Stage 1: Establishment of Central Register of Not-for-Profit Legal Persons with the Ministry of Justice (time frame: January – May 2004; responsible institution: Ministry of Justice; activities: amendments to the Law on Not-for-Profit Legal Persons, adoption of secondary legislation governing the organization and activities of the register, and setting up the register on the basis of the existing Central Register for Public Benefit Not-for-Profit Legal Persons);

  • Stage 2: Establishment of Central Commercial Register (time frame: May 2004 – May 2005; responsible institution: Ministry of Justice; activities: amendments to the Commercial Law and the Civil Procedure Code and setting up the Central Commercial Register);

  • Stage 3: Establishment of Central Register of Legal Persons (time frame: May – October 2005; responsible institution: Ministry of Justice; activities: merging the Central Register of Not-for-Profit Legal Persons and the Central Commercial Register into a Central Register of Legal Persons);

  • Stage 4: Establishment of Electronic Registries Center (time frame: long-term, starting October 2005; responsible institutions: Ministry of Justice or another ministry, under which the Center will be set up; activities: adoption of a Law on the Electronic Registries Center and the respective secondary legislation and setting up the Electronic Registries Center).


The stages as listed in the Plan for Implementation of the E-Government Strategy follow the steps proposed by the CSD Registration Reform Task Force in the report Opportunities for Establishment of Central Register of Legal Persons and Electronic Registries Center in Bulgaria.

On April 22, 2004, the Council of Ministers adopted Decision No. 332/30.04.2004 for setting up a Working Expert Group for Developing a Strategy for Establishing a Central Electronic Register of Legal Persons and of an Electronic Registries Center of the Republic of Bulgaria. The decision sets a three month term for the preparation of the Strategy. The Working Group will be chaired by the Minister of Justice and will include representatives of the following institutions and organizations: Ministry of Justice, Ministry of Regional Development and Public Works, Ministry of Economy, Ministry of Finance, Ministry of Agriculture and Forestry, Ministry of Transport and Communications, the team of the Minister of State Administration, Supreme Judicial Council, the administration of the Council of Ministers, and the Center for the Study of Democracy. Two representatives of the CSD Registration Reform Task Force, Dr. Maria Yordanova, Director of CSD Law Program, and Mr. Borislav Belazelkov, Justice at the Supreme Court of Cassation, will participate in the Working Group.

The setting up of the Working Group is the first step towards implementing the stage-by-stage plan, envisaged in the governmental decision of March 11. Building upon this plan, the Strategy to be elaborated by the Working Group should describe in detail the individual steps to be undertaken, especially in view of developing the necessary legislative changes.

Expected follow-up

Both decisions of the Council of Ministers demonstrate the will of the Bulgarian Government to actively engage with the reform of the registration system in the country. The timeline for developing the Strategy creates reasonable expectations that the document will be completed before the summer. This will allow the government to proceed with the next steps before the end of the year and to start the process of drafting the necessary legislation, in which the CSD Registration Reform Task Force will be again actively involved by providing expertise and assistance.
 
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