Ex. No. 454-00-454
Mr ROSEN PLEVNELIEV
PRESIDENT OF THE REPUBLIC OF BULGARIA
MRS TETSKA TSACHEVA
PRESIDENT OF THE PEOPLE
MEETING
Mr. BOYKO BORISOV
PRIME MINISTER
Mr Tsvetan Tsvetanov
CHAIRMAN OF
PG OF PP GERB
MR MIKHAIL MIKOV
CHAIRMAN OF
PG "BSP LEFT BULGARIA"
MR LUTVI MESTAN
CHAIRMAN OF
PG DPS
MR NAIDEN ZELENOGORSKI
CO-CHAIRMAN OF
PG "REFORMATORSKI BLOK"
MR RADAN KANEV
CO-CHAIRMAN OF
PG "REFORMATORSKI BLOK"
Mr. Valery Simeonov
CHAIRMAN OF
PG "PATRIOTIC FRONT"
Mr. Svetlin Tanchev
CHAIRMAN OF
PG "BULGARIAN DEMOCRATIC CENTER"
Mr. BORISLAV BORISOV
CO-CHAIRMAN OF
PG "ABV"
MRS ROSITSA YANAKIEVA-KOSTADINOVA
CO-CHAIRMAN OF
PG "ABV"
MR VLADISLAV GORANOV
MINISTER OF FINANCE
MRS. DESISLAVA TANEVA
MINISTER OF AGRICULTURE
AND THE FOOD
MRS MENDA STOYANOVA
CHAIRMAN OF THE COMMISSION
ON BUDGET AND FINANCE
TO THE 43RD NS
MR RUMEN CHRISTOV
CHAIRMAN OF THE COMMISSION
AGRICULTURE AND FOOD
TO THE 43RD NS
Mr. DANAIL KIRILOV
CHAIRMAN OF THE COMMISSION
ON LEGAL MATTERS
TO THE 43RD NS
MR NAIDEN ZELENOGORSKI
CHAIRMAN OF THE COMMISSION
ON REGIONAL POLICY,
DEVELOPMENT AND LOCAL GOVERNMENT
TO THE 43RD NS
Mr. Stoyan Mavrodiev
CHAIRMAN OF THE COMMISSION
ON FINANCIAL SUPERVISION
Mr. KONSTANTIN PENCHEV
OMBUDSMAN OF THE REPUBLIC OF BULGARIA
DEAR MEMBERSHIP AND LORD,
We hereby express the concern of our members - public companies traded on the Bulgarian Stock Exchange (BSE) in connection with the implementation of part of the texts of the Law on Amendments and Supplements to the Law on the Ownership and Use of Agricultural Lands, finally adopted at the end of April ), promulgated in SG No. 38 of 7.05.2014/XNUMX/XNUMX, expressed as follows:
The provisions of Article 3, of the newly adopted paragraph 7, item 1 and item 2 in connection with paragraph 4, 5 and 6 provide that:
Art. 3. (1) (Amended - SG No. 28 of 1992) Agricultural lands can be owned by citizens, the state, municipalities and legal entities.
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(4) (Amended - SG No. 28 of 1992, No. 24 of 2007) Foreigners or foreign legal entities may acquire ownership rights to agricultural land under the terms of an international treaty ratified in accordance of Art. 22, para. 2 of the Constitution of the Republic of Bulgaria, promulgated and entered into force, and foreigners - also in case of inheritance by law.
(5) (New - SG No. 24 of 2007) Citizens of the member states of the European Union, and of the states party to the Agreement on the European Economic Area, may acquire the right of ownership of agricultural land under the conditions of this law after the expiration of the period specified in the Treaty on the Accession of the Republic of Bulgaria to the European Union.
(6) (New - SG No. 24 of 2007) Legal entities from the member states of the European Union, or from the states that are parties to the Agreement on the European Economic Area, may acquire ownership rights to agricultural land in accordance with para. 5.
(7) (New - SG No. 38 of 2014) The following cannot acquire and hold ownership rights over agricultural land:
1. commercial companies in which the partners or shareholders are directly or indirectly companies registered in jurisdictions with a preferential tax regime;
2. commercial companies in which partners or shareholders are foreigners, other than the natural persons under para. 4 and 5, or foreign legal entities, other than those under para. 4 and 6, as well as sole proprietorships established by such individuals or legal entities;
The interpretation of these provisions requires the indisputable conclusion that:
any public company in which even one share is held by:
– 1. a company registered in jurisdictions with a preferential tax regime (listed in detail in § 1, item 64 of the additional provisions of the Corporate Income Tax Act) and/or
– 2. to citizens from outside the EU member states and the states that are parties to the Agreement on the European Economic Area (EEA) or to a company established by such citizens,
HAS NO RIGHT TO ACQUIRE AND HOLD title to agricultural land.
According to the current legislation, the shares of public companies are traded freely on the BSE, after approval of the prospectus by the regulator - Financial Supervision Commission. The transfer and trading of shares is not under the control of public companies, and persons (individuals and/or legal entities) cannot be prohibited or restricted from buying, acquiring and selling their own shares through the Bulgarian Stock Exchange.
Shares of companies from all sectors of the country's economy are traded on the BSE, including:
– Primary sector
→ Agriculture of Bulgaria
– Secondary sector
→ Energy
→ Chemical industry
→ Metallurgy
→ Food industry
→ Mechanical engineering
→ Extraction of minerals
→ Production of building materials
– Tertiary sector
→ Foreign trade
→ Financial sector
→ Transport and communications
→ Tourism
Each company from the listed sectors has a constantly changing composition of its shareholders and as a result of interpretation and application of the cited provision, they should not be able to acquire agricultural land.
Familiarizing ourselves in detail with the opinions expressed and the reasons during the introduction and discussion of the Law on Amendments and Supplements to the Social Security Act, promulgated in State Gazette No. 38 of 7.05.2014, we believe that the will and intentions of the legislator were not to introduce such restrictions for public companies, and for foreigners, companies of foreigners and those registered in jurisdictions with a preferential tax regime and with unclear ownership and origin of the capital!
Public companies traded on the BSE are legal and financial entities in the Republic of Bulgaria with a clear origin of the funds, up-to-date data on the shareholding (visible at any time from the information of the Central Depository AD) and subject to supervision and strict control by the regulatory authorities - KF N, BSE, Central Depository, etc.
Another confirmation of the thesis that the restriction introduced by Art. 3, Para. 7, Item 1 and Item 2 of the ZSPZZ, was not intended to limit and/or hinder the activity of public companies traded on the BSE, are the provisions in The Law on Economic and Financial Relations with Companies Registered in Jurisdictions with a Preferential Tax Regime, Related Persons and Their Beneficial Owners (promulgated - SG No. 1 dated 3.01.2014, effective from 1.01.2014) exceptions:
Exceptions
Art. 4. Article 3 shall not apply where:
1. the shares of the company in which a company registered in a jurisdiction with a preferential tax regime directly or indirectly participates are traded on a regulated market in a member state of the European Union, or in another state party to the Agreement on the European Economic Area, or on a market included in the list under the Social Security Code, the Law on the Public Offering of Securities or the Law on the Activities of Collective Investment Schemes and other Collective Investment Enterprises, and the actual owners – natural persons, are announced in accordance with the relevant special law;
2. ………………………
3. the company registered in a jurisdiction with a preferential tax regime is part of an economic group whose parent company or subsidiary is a Bulgarian resident and its actual owners - natural persons, are known or traded on a regulated market in a member state of the European Union union, or in another country - a party to the Agreement on the European Economic Area;
We believe that the goals and motives pursued with the adoption of this law are the same as with the adoption of the Law on Amendments and Supplements to the Health and Safety Protection Act, promulgated in SG No. 38 of 7.05.2014/XNUMX/XNUMX.
WE OFFER:
As soon as possible, a draft law for the amendment and addition of the Agricultural Land Act should be submitted for discussion in the National Assembly, which would provide for an explicit text in the Law on the Ownership and Use of Agricultural Lands, which would stipulate that:
"The restrictions under Article 3, paragraph 7, items 1 and 2 do not apply to public companies whose shares are traded on a regulated market in a member state of the European Union, or in another country - a party to the Agreement on The European Economic Area, or on a market listed under the Social Security Code, the Law on the Public Offering of Securities or the Law on the Activities of Collective Investment Schemes and Other Collective Investment Undertakings, and the same companies and their shareholders have disclosed the required information including for equity participation in accordance with the Law on the Public Offering of Securities and the legislation in force in the Republic of Bulgaria."
The Law on the Public Offering of Securities (PLPAC) and the acts on its implementation, as well as the other normative acts governing the matter, have provided for sufficiently effective mechanisms for control and disclosure of shareholding in public companies and for informing and controlling the relevant competent state authorities on them. An order and regime for informing and disclosing information to the Financial Supervisory Service, the regulated market - BSE, the Central Depository, as well as the public about the shareholding in public companies and the change in it at any moment is foreseen.
We are still waiting for you to exercise the powers granted to you by law and take the necessary actions for a quick, efficient and comprehensive solution to the above problems.
We stand ready to assist you in your problem-solving efforts by participating in discussions, providing opinions and comments, and providing any other help and assistance you deem appropriate within our capabilities and capacity.
With respect,
Eugene Ivanov
Ex. director and member of the Board of Directors
http://www.turbulence.tech