WT/TPR/S/121 Trade Policy Review
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III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) Overview
1. Since acceding to the WTO in December 1996, Bulgaria has progressively liberalized its
trade regime. This liberalization has taken place on multilateral, regional and bilateral levels. Applied
MFN tariff rates have fallen from 17.2% in 1996 to 11.6% in 2003. However, tariff liberalization for
industrial products has been more rapid than for agricultural products. There are also wide gaps
between applied and bound MFN tariffs. The current average bound MFN rate is 28.2%.
2. Bulgaria's trade liberalization is also taking place through a network of regional and bilateral
free-trade agreements, of which bilateral liberalization with the EU is the most important: acceding to
the EU by 2007 is the foreign political and economic priority of the Bulgarian Government. Most of
these preferential agreements provide for duty-free access of industrial goods and selective
liberalization of trade in agricultural goods. In general, the average applied preferential rates range
between 2.5% and 5.9%, depending on the agreement.
3. Liberalization of other non-tariff measures includes the abolition of the use of automatic
licences, and the reduction of non-automatic licences and import and export prohibitions to a
minimum, in most cases in accordance with Bulgaria's obligations under international agreements, for
safety and environmental concerns.
4. The regulatory environment affecting trade has also undergone considerable revision. Most of
the changes have been motivated by Bulgaria's WTO obligations and the move to harmonize its
domestic legislation with that of the EU. They include legislative changes to its customs procedures,
rules of origin, anti-dumping and countervailing action, safeguard action, SPS, TBT, and TRIPS.
Bulgaria has also strengthened its legislation on bankruptcy and insolvency procedures, and on
competition policy. This has contributed creating a more transparent and predictable trading regime in
Bulgaria. Nonetheless, there remain implementation and enforcement challenges.
(2) Measures Directly Affecting Imports
(i) Registration, documentation, and procedures
5. The main legislation governing importation into Bulgaria is the 1998 Customs Act and its
implementing regulations.1  This Act, which replaced the Customs Act of 1960, harmonizes Bulgaria's
customs legislation with that of the European Un ion.  Under the Act, the importation of goods into
Bulgaria is without restriction, except for a few products subject to import permits (Section (viii)).Since 2001, all specific registration requirements for customs purposes have been eliminated.   Tax
registration and registration of economic entities under the BULSTAT register is required for the
purposes of customs clearance.
2
6. The official document for a written customs declaration is the Single Administrative
Document (SAD), which is identical to that used by the EU member States.  Documents relating tothe specific customs regime under which the goods are declared must be attached to the SAD.
Required accompanying documents for imports for consumption in Bulgaria include: invoice,
                                                     
1 Promulgated in the State Gazette  No. 15/1998 in force from 01.01.99; Amended in State Gazette
Nos: 89/1998; 153/1998; 30/1999; 83/1999; and 63/2000.
2 The aim of the BULSTAT register is the unified registration of all units carrying out economic or
public activity.Bulgaria WT/TPR/S/121
Page  37
declaration of value, certificate of origin (where preferential tariff treatment is envisaged),
transportation documents, and veterinary/phytosanitary certificate (if required by law).
7. The main problems of Bulgaria's customs administration are reportedly in its administrative
and operational capacity.3 The authorities have taken steps to address these issues, including changes
to the senior management of the Customs Agency and the recruitment of external expertise to assist
the Government on customs reforms. With substantia l external assistance, Bulgaria has been working
to address these problems over the past few years, including improving capacity to implement the EU
customs acquis , accelerating clearance of goods, and reducing smuggling and corruption.  Beginning
in 2000, "twinning" programmes were established with Germany, to improve administrative capacity
in relation to the customs  acquis,  and with France, focussing on combating customs fraud in
particular in relation to objets d'art and intellectual property issues.  The senior management of the
Customs Agency was changed in 2002.  Since 2002, Bulgaria has been pursuing a three-year
programme of customs reform with the assistance of the U.K. Crown Agents. This programmeincludes further improvements in legislation, development of effective management and raising
ethical standards, training of customs officials, and in particular improvements in customs controls
and anti-smuggling activities through the deployment of "mobile assurance teams" whose task is to
investigate shipments passing through Customs points.  In addition to bilateral assistance, the World
Bank supports customs reform in Bulgaria under its regional programme for trade and transportfacilitation in south-east Europe.  The project for Bulgaria seeks to reduce non-tariff costs to trade and
transport, and to reduce smuggling and corruption at border crossings through: institutional reform
of customs administration, trade facilitation development, improvement of the Bulgarian Integrated
Customs Information System (BICIS) system, improv ement of border crossing facilities, and support
for project implementation.
8. Internal measures being implemented by customs authorities are aimed at strengthening the
administrative and operational capacity to implement the customs acquis and fight against
corruption. As regards strengthening the administrative capacity, the updated Business Strategy
adopted for the period up to 2006 has four key goals:  (i) adaptation of customs administration to EU
requirements;  (ii) strengthening cooperatio n between the customs administration, economic
operators, trade sector, and the public;  (iii) improving the efficiency of collection of customs duties
and other state receivables within the competence of the Customs Agency;  and (iv) implementing thestate customs policy to combat customs offences and currency offences and crimes.  A national
strategy against corruption was adopted in October 2001.  Anti-corruption measures being
implemented in the customs field include an obligat ion under the Customs Ethics Code, introduced in
July 2002, for customs officials to submit to the attention of the Director General of the Customs
Agency declarations on the state of their property personal, as well as of the members of theirfamilies.  Such information may also be verified through the tax authorities at the written request of
the Director-General of Customs.
9. These measures are  achieving results in terms of Customs revenue and of broader objectives.
Since September 2002, when mobile assurance teams were introduced, there has been a steady and
consistent increase in Customs revenue:  for instance, in January-May 2003, revenues increased by158% compared with the same period of 2002.
4  More broadly, a recent report by the Centre for the
Study of Democracy confirms that favourable developments have emerged from the reforms to date,
although smuggling and associated corruption remain a problem for the economy.5
                                                     
3 According to several issues of the EC's Regular report on Bulgaria and USTR (2001).
4 Information provided by Crown Agents through Bulgarian authorities.
5 CSD (2002).WT/TPR/S/121 Trade Policy Review
Page 38
(ii) Tariffs
(a) Overview
10. Bulgaria’s tariff is entirely bound under GATT 1994, including zero rates for products falling
under the Plurilateral Agreement on Civil Aviation and the Agreement on Information Technology.
The average level of bound MFN rates, even at the end of the Uruguay Round application period,
substantially exceeds the applied MFN level.  Like other prospective members of the European
Union, the greater part of Bulgaria’s trade is conducted with preferential partners within regional and
bilateral trade agreements (section (f) below). Under these, almost all industrial products gain dutyfree access to Bulgaria; selected agricultural goods receive reduced tariffs.  Developing countries
(including least developed countries) also receive preferential treatment under Bulgaria’s GSP
scheme, with duty-free treatment for LDCs and ta riff reduction for other developing countries.
(b) Tariff structure
11. Bulgaria joined the International Convention on Harmonized Commodity Description and
Coding System (the HS) in 1990. Since January 1992, the nomenclature of goods of the Bulgarian
Customs Tariff has been based on the Convention. All subsequent changes to the HS have been
introduced into the Bulgarian nomenclature. The adoption of the 1998 Customs Act also implied
harmonization of Bulgaria's customs code with that of the EU Combined Nomenclature, a pre-
accession requirement. Currently, 98% of Bulgaria's tariff lines are harmonized with those of the EU(Box III.1), the remainder contain national sub-divisions.  Each tariff line of the Combined
Nomenclature of the Republic of Bulgaria is identified by a nine-digit code, with the first six digits
referring to the common coding of the Harmonized System; the seventh and eighth digits identifying
the sub-headings of the Combined Nomenclature of the EU; and the ninth digit reflecting sub-
divisions at the national level.
6
12. Since 1996, Bulgaria has published an Integrat ed Customs Tariff, which includes MFN
applied customs duties, preferential tariff rates, and tariff quotas.  In general, annual proposals fortariff changes are made by the Ministry of Economy, taking into account Bulgaria's WTO
commitments under its schedule of concessions and commitments, as well as proposals received for
autonomous tariff changes in consultation with other ministries and with industrial and trade
associations. The Customs Agency drafts the tariff in accordance with the proposals of the Ministry of
Economy and, through the Ministry of Finance, introduces the draft for approval by the Council ofMinisters.  Specific changes in Bulgaria's tariff for 2003 include: updating the goods nomenclature
and supplementary measurement units, replacing the existing column for common rates with separate
duty columns for "conventional and autonomous rates" , in keeping with the form of the EU Common
Customs Tariff, and the introduction of the necessary conditions for functional compatibility of
Bulgaria's Customs Information Technol ogy systems with that of the EU.
                                                     
6 In case of the absence of subdivision at the national level, the ninth digit is zero.Bulgaria WT/TPR/S/121
Page  39
Box III.1:  Comparison of Bulgarian and EU tariffs
Bulgaria seeks to align its tariff with the European Union's Common External Tariff (CET) by 2007.
Bulgaria adopted the EU's Combined Nomenclature in 1999 with the passing of  the new Customs Act.
98% of Bulgaria's tariff lines are harmonized with those of the EU.  The Bulgarian tariff (in 2003) contains
10,606 tariff lines at the nine-digit level, 206 more than the CET.  These extra "national tariff lines" exist
mainly in HS chapters: 01 - live animals; 02 - meat and offal; 03 -fish and crustaceans; 04 - dairy products
and eggs; 06 - live plants; 07 - vegetables; 08 - fruit and nuts; 10 - cereals; 18 - cocoa and chocolate; 22 -beverages, spirits and vinegar; 28/29 - inorganic and organic chemicals; 33 – essential oils and cosmetics;40 - rubber and products; 48 - paper and board; 70 - glass and glassware; 84 – machinery; 87 - vehicles; and90 - optical and precision instruments.
The unweighted average of Bulgaria's tariff, at 11.6%, is  five percentage points higher than that of the EU,
which is 6.4%. In HS chapters 25-97, the spread of Bulgaria's tariffs is very similar to that of the EU – 0 to40% as against 0 to 39.8% - although the Bulgarian av erage is 8.6% against 3.8%.  For the agricultural
chapters 1-24, the situation is different: although Bulgaria's unweighted average rate is higher – 21.7%against 15.9% for the EU – the spread of tariffs is less wide; Bulgaria's tariffs for HS 01-24 range from 0 to80%, whilst that of the EU range from 0 to 209.9%, thus reflecting the higher level of EU protection in
certain specific areas.
In 2002, maximum EU rates exceed Bulgaria's maxima in HS chapters:  01 - live animals (EU
107.8/Bulgaria 11.5); 02 - meat and offal (192.2/74.0); 03 - fish and crustacea (23/20); 04 - dairy products
and eggs (209.9/74.0); 07 - vegetables (150.1/80.0); 08 - fruits and nuts (118.1/74.0); 10 - cereals(101.1/25.0); 11 – milling products (84.4/25.0); 12 - oilseed s (52.3/40.0); 15 - animal and vegetable fats and
oils (75.8/25.0); 16 -preparations of meat, fish an d crustaceans (97.2/40.0); 17 - sugars and confectionery
(114.4/50.0); 20 -vegetable and fruit preparations (146.9/40.0); 22 - beverages, spirits and vinegar
(58.6/55.0); 23 – food wastes and residues, animal fodder (76.0/40.0); and 24 - tobacco (74.9/60.0).
Source: WTO Secretariat, based on tariff information supplied by Bulgarian and EU authorities.
(c) Bound rates
13. Bulgaria bound all its tariffs under GATT 1994 on accession to the WTO. Currently, bound
tariffs rates exceed applied rates: the average overall bound rate is 28.2% as against an averageapplied rate of 11.6%; the maximum bound rate is 200% and the maximum applied rate is 80% (Table
III.1). In theory, this gives Bulgaria considerable latitude to raise its tariffs within existing bindings
for safeguard purposes (see section (x) below). Bulgaria's move towards EU membership means that
from the date of accession, Bulgaria’s national tariff will be superseded by that of the EU.  In some
cases, particularly in agriculture, this may mean tariffs increasing on both bound and applied bases.Tariffs on products covered by the Plurilateral Agreement on Civil Aircraft and the Information
Technology Agreement are bound at zero.
7
(d) Applied rates
14. Bulgaria's current simple average applied MFN tariff rate is 11.6%; this has declined from an
average of 17.7% in 1998, reflecting the liberalization of its trade regime since its accession to theWTO. In 2003, 14.6% of tariff lines were duty-free and 60% not higher than 10%. The modal tariff
rate range of 5-10% covers 30.2% of tariff lines. With a standard deviation of 11%, the coefficient of
variation of 95% is relatively high, reflecting broad tariff dispersion. The range of applied tariffs is
between 0% and 80%, however only about 25% of all tariff lines are above 15% (Table III.2).
                                                     
7 For one tariff line in the ITA list (cash registers) full reduction of the bound rate to zero is delayed to
2004.WT/TPR/S/121 Trade Policy Review
Page 40
Table III.1
Bulgaria: bound and applied tariffs, 2003
Bound Applied
N° of tariff lines 10,606 10,606
Unweighted average 28.2 11.6
Minimum 0.0 0.0
Maximum 200.0 80.0
By stage of processing:
- Stage 1 (raw materials) Average
MinimumMaximum29.1
0.0
200.09.6
0.0
80.0
- Stage 2 (semi-manufactures) Average
MinimumMaximum21.6
0.0
128.08.8
0.0
50.0
- Stage 3 (finished products) Average
MinimumMaximum31.4
0.0
200.013.4
0.0
74.0
By HS Chapter:
HS 01-24 Average
Minimum
Maximum47.6
0.0
200.021.7
0.0
80.0
HS 25-97 Average
Minimum
Maximum22.7
0.0
128.08.6
0.0
40.0
Source: WTO Secretariat calculations.
Table III.2
Structure of MFN tariffs in Bulgaria(Per cent)
1998 2002 2003
1.  Bound tariff lines (% of all tariff lines) 100.0 100.0 100.0
2.  Duty-free tariff lines (% of all tariff lines) 5.2 15.0 14.6
3.  Non- ad valorem  tariffs (% of all tariff lines) 3.6 3.6 3.7
4.  Tariff quotas (% of all tariff lines) 2.4 2.2 2.1
5.  Non- ad valorem  tariffs with no AVEs (% of all tariff lines) 3.6 3.6 3.7
6.  Simple average applied rate 17.7 11.5 11.6
      Agricultural products (HS 01-24) 26.2 21.6 21.8
      Non-agriculral products (HS 25-97) 15.2 8.6 8.6
      Agricultural products (WTO definition)b27.2 22.3 22.6
     Non-agricultural products (WTO definition)c15.2 8.7 8.7
7.  Domestic tariff "spikes" (% of all tariff lines)d0.7 5.1 5.1
8.  International tariff "peaks" (% of all tariff lines)e39.7 25.3 25.3
9.  Overall standard deviation 11.7 10.9 11.0
10.  "Nuisance" applied rates (% of all tariff lines)f0.4 0.7 0.7
a Based on 1998 tariff file nomenclature.
b WTO Agreement on Agriculture.
c Excludes petroleum.d Domestic tariff spikes are defined as those exceeding three times the overall simple average applied rate.
e International tariff peaks are defined as those exceeding 15%.
f Nuisance rates are those greater than zero, but less than or equal to 2%.
Note: Indicator 1 is calculated taking into account all tariff lines (i.e. in-quota and out-of-quota lines).
Indicator 4 is the share of in-quota lines if less than the corresponding out-of-quota rate on the total number of lines (exclu ding
in-quota).
Source: WTO Secretariat calculations, based on data provided by the Bulgarian authorities.Bulgaria WT/TPR/S/121
Page  41
15. Tariffs applied to agricultural products are generally higher than those on industrial products.
For 2003, the simple average applied MFN rate for agricultural products (WTO definition) was
22.6%, almost 2.5 times the rate for non-agricultural  products, which was 8.7%;  the maximum tariff
rate applied to agricultural products was 80%, as against 40% for chapters 25-97.8 Tariffs of 15% or
below apply to 43% of agricultural goods and to 83% of non-agricultural goods. Since Bulgaria’s
WTO accession, trade liberalization has been much faster for industrial products than for agricultural
goods: average rates in 1996 were 16.1% and 26.2% respectively. The variability of tariffs is also
much greater for agricultural products than for industrial products; thus, as expected, most of thehigher MFN bound rates and applied tariff peaks in Bulgaria's tariff are on agricultural products.
16. One-quarter of the tariff lines in HS chapters 1 to 24  bear applied rates of 40% or over (597
lines).  These rates cover products in HS chapters 02 (meat and offal), 04 (dairy products, eggs etc.),
07 (vegetables), 12 (oilseeds), 16 (preparations of meat, fish, etc.), 17 (sugar and confectionery), 18
(cocoa and chocolate), 19 (baked goods etc.), 20 (fruit and vegetable preparations), 21 (miscellaneousedible preparations), 22 (beverages, spirits and vinegar), 23 (food residues and animal fodder) and 24
(tobacco and products), reflecting the structure of Bulgaria’s agriculture and food sectors.  Generally
speaking, the most commonly applied higher rate is 40%, although it is quite frequently treated as a
minimum in mixed rates;  however, rates of 74%, 75% and 80% apply to chicken preparations,
cheese, some vegetables and fruit on a seasonal basis, again sometimes as a minimum, and tochocolate. The distribution of higher tariff rates for products in Chapters 25-97 is also skewed towards
particular products, including carpets and other textile floor coverings, clothing and accessories,
footwear, and ceramic products (Chart III.1 and Chart III.2).
17. Bulgaria's Customs Tariff contains ad valorem duties, specific duties, mixed duties, and
compound duties (Chart III.3). Duties on industrial products (WTO definition) are all ad valorem ,
whereas all four types of duties are applicable to agricultural goods. Ad valorem  rates make up 83.9%
of the tariff lines on agricultural products, mixed duties account for 7.7% whilst compound andspecific duties account for 6.8% and 1.6% respectively. Bulgaria applies seasonal tariffs on cut
flowers, new potatoes, tomatoes, onions, shallots, garlic, leeks, and other alliaceous vegetables,
cabbages, cucumbers, gherkins and peppers, fresh grapes, apples, pears, quinces, peaches and
nectarines, and sunflower seeds.
(e) Tariff escalation18. On the basis of the International Standard Industrial Classification (ISIC), the tariff structure
shows escalation; the first and semi-processed stage of manufacturing attract average rates of 7.8%
and 8.8% respectively and fully processed products attract an average tariff of 13.4%.  Tariff
escalation appears to be relatively marked in the food, beverage and tobacco, textile and leather, wood
and furniture, and chemicals sectors (Chart III.4).
                                                     
8 Only one tariff line in chapters 25-97 bears a rate of 40%:  item 3302.10.100 – mixtures of flavours
for the food industry, which is considered as an agricultural product in WTO terms.WT/TPR/S/121 Trade Policy Review
Page 42
Chart III.1                                             
Tariff averages in HS chapters 01-24, 2003
020406080100120
01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24Per cent
WTO Secretariat calculations, based on data provided b y the Bul garian authorities.Average MFN rate
 (21.8%) 
HS
01
02
03
04 05
06
0708
09
10
11
1213
14
1516
17
18
19
2021
22
2324Description
Live animals
Meat and edible meat offals
Fish and crustaceans, molluscs and other aquatic invertebrates
Dairy produce, birds eggs, natural honey, edible products of animal origin  Products of animal origin, n.e.s.
Live trees and other plants;  bulbs, roots and the like;  cut flowers
Edible vegetables and certain roots and tubersEdible fruit and nuts;  peel of citrus fruits or melons
Coffee, tea, maté and spices
Cereals
Products of the milling industry;  malt;  starches;  wheat gluten
Oil seeds and oleaginous fruits;  miscellaneous grains, seeds and fruitLacs;  gums, resins and other vegetable saps and extracts
Vegetable plaiting materials;  vegetable products n.e.s.
Animal or vegetable fats and oils and other cleavage products;  prepared edible fats; etc.Preparations of meat, or fish or of crustaceans, molluscs or other aquatic invertebrates
Sugars and sugar confectionery
Cocoa and cocoa preparations
Preparations of cereals, flour, starch or milk;  pastrycooks' products
Preparations of vegetables, fruit, nuts or other parts of plantsMiscellaneous edible preparations
Beverages, spirits and vinegar
Residues and waste from the food industries;  prepared animal fodderTobacco and manufactured tobacco substitutesFinal GATT (1994) bindings
Applied MFN rates
Source : Bulgaria WT/TPR/S/121
Page  43
0510152025303540
25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 78 80 82 84 86 88 90 92 94 96Per cent
Average 2003
applied rate 
(8.6%)
HS       Description
25         Salt; sulphur; earths and stone, etc.
26         Ores, slag and ash
27         Mineral fuels, mineral oils, etc.
28         Inorganic chemicals; organic or 
             inorganic compounds of precious
             metals, etc.
29         Organic chemcials30         Pharmaceutical products
31         Fertilizers    
32         Tanning or dyeing extracts etc. 
33         Essential oils and resinoids;
             perfumery, cosmetic or toilet
             preparations
34         Soap, organic surface-active 
             agents washing prep., etc.    
35         Albuminoidal substances;             modified starches; glues, etc.
36         Explosives; pyrotechnic products;
             matches, etc
37         Photographic or cinematographic 
             goods
38         Miscellaneous chemical products
39         Plastics and articles thereof
40         Rubber and articles thereof
41         Raw hides and skins and leather42         Articles of leather, etc.
43         Furskins and artifical fur; 
             manufactures thereof
44         Wood and articles of wood, etc.
45         Cork and articles of cork
46         Manuf. of straw, of esparto, etc.   
47         Pulp of wood or of other 
             fibrous cellulosic materialHS       Description
48         Paper and paper board, etc.
49         Printed books, newspapers, etc.
50         Silk
51         Wool; fine or coarse animal
             hair, etc.
52         Cotton
53         Other vegetable textile fibres 54         Man-made filaments   
55         Man-made staple fibres 
56         Wadding, felt and non-wovens;
             special yarns; twine, cordage, etc.
57         Carpets; other textile floor
             coverings
58         Special woven fabrics; lace, etc.
59         Impregnated, coated, covered or
             laminated textile fabrics, etc.60         Knitted or crocheted fabrics    
61         Articles of apparel and clothing
             accessories, knitted or crocheted
62         Articles of apparel and clothing
             accessories, not knitted, etc.
63        Other made-up textile articles;
             sets, worn clothing, etc.
64         Footwear, gaiters, etc.
65         Headgear and parts thereof66         Umbrellas, walking-sticks, etc. 
67         Prepared feathers and down, etc.
68         Articles of stone, plaster, etc.
69         Ceramic products
70         Glass and glassware
71         Natural or cultured pearls,
             precious or semi-precious
             stones, precious metals, etc.HS       Description
72         Iron and steel
73         Articles of iron and steel
74         Articles of iron and steel
75         Nickel and articles thereof
76         Aluminium etc. 
77         unassigned chapter
78         Lead and articles thereof   79         Zinc and articles thereof 
80         Tin and articles thereof
81         Other base metals, etc.
82         Tools, implements, cutler
             spoons and forks, etc.
83         Misc. articles of base metals
84         Nuclear reactors, boilers,
             machinery, etc.
85         Electrical machinery and             equipment, etc.
86         Railway or tramway 
             locomotives, etc.
87         Vehicles other than railway
             or tramway rolling-stock; etc.
88         Aircraft, spacecraft, etc.
89         Ships, boats, etc.
90         Optical, photographic, etc. 
             apparatus91         Clocks and watches, etc.
92         Musical instruments, etc.
93         Arms and ammunition, etc.
94         Furniture, bedding, etc.
95         Toy, games, etc.
96         Miscellaneous manuf. 
             articles
97         Works of art, antiques, etc.Chart III .2
Tariff averages in HS chapters 25-97, 2003
No entries for HS Chapter 77. 
WTO Secretariat calculations, based on data provided b y the Bul garian authorities.Note:
Source:Applied MFN ratesFinal GATT (1994) bindingsWT/TPR/S/121 Trade Policy Review
Page 44
Share of linesChart III.3
Composition of Bulgaria's tariff, 2003
WTO Secretariat estimates, based on data provided b y the Bul garian authorities. Source :Agriculture sector (HS 01-24) Ma nufacturing sector (HS 25-97)
Compound 
duties
6.8%Mixed duties
7.7%
Total lines: 8,165Ad valorem
99.99%Mixed duties
0.01%
Ad valorem
83.9%Specific duties
1.6%
Avg. MFN rate
21.8%Avg. MFN rate
8.6%
Total lines: 2,441
051015202530
Food, beverages
and tobaccoTextile and
leatherWood and
wooden furniturePaper, printing
and publishingChemicals Non-metal
mineral productsBasic metal Fabricated metal
products,
machineryOther
manufacturingPer centChart III.4
Tariff escalation by 2-digit ISIC industry, 2003a
Based on 10,561 tariff lines (excl. specific and five mixed rates).
WTO Secretariat calculations, based on data provided b y the Bul garian authorities.a
Source :First stage of processing
Semi-processed
Fully processedBulgaria WT/TPR/S/121
Page  45
(f) Preferences
19. Bulgaria maintains a wide range of regional and bilateral preferential agreements, covering
the majority of its trade. Imports from parties to such agreements accounted for 61.6% of Bulgaria'simports in 2000 and 66.7% in 2002 (Table III.3). As noted in Chapter II, Bulgaria has preferential
trading agreements with 32 partners: the fifteen members of the EU, the four EFTA states, the seven
members of CEFTA, the three Baltic States
9, the Former Yugoslav Republic of Macedonia, Israel, and
Turkey.  Under these agreements, industrial products in HS chapters 25-97 are generally granted duty-
free treatment while selected agricultural products in Chapters 1-24 are duty-free or carry reducedrates of duty, often with tariff quotas.  The average levels of preferential tariffs under these
agreements range from 2.5% to 5.9% for all products; from 12.0% to 22.1% for agricultural products
(WTO definition) and from zero to 2.1% for WTO non-agricultural products, varying according to
agreement.  Table III.4 compares the range of MFN and preferential duties maintained by Bulgaria.
Bulgaria also maintains selective preferences for developing countries and LDCs under its GSPscheme.  Generally, developing countries benefit from reduced rates on the products included in the
scheme, while LDCs gain duty-free entry.
20. Box III.2 describes Bulgaria's preferential network in 2002.
Table III.3
Imports from RTA sources, 1998-02
(US$'000)
1998 1999 2000 2001 2002
Total imports 4,956,727 5,515,078 6,507,101 7,260,803 7,896,978
EU 2,239,289 2,668,123 2,865,225 3,582,816  3,964,118
CEFTA 274,567 353,711 568,355 550,650 575,003
Turkey 122,075 166,988 214,387 273,266 390,066
EFTA 82,922 82,832 89,245 90,477 107,845
Romania 57,644 74,375 230,831 172,347 162,693
Macedonia 36,227 25,203 26,022 19,539  23,887
Israel 12,729 18,073 10,885 18,808 18,504
Estonia 234 251 230 465 328
Lithuania  2,679  3,434  2,525 2749 551.9
Croatia  5,807  2,262  3,687 2307 14,806
Percent of total imports
EU 45.2 48.4 44.0 49.3 50.2
CEFTA 5.5 6.4 8.7 7.6 7.3
Turkey 2.5 3.0 3.3 3.8 4.9
EFTA 1.7 1.5 1.4 1.2 1.4
Romania 1.2 1.3 3.5 2.4 2.1
Macedonia 0.7 0.5 0.4 0.3 0.3
Israel 0.3 0.3 0.2 0.26 0.23
Estonia 0.0 0.0 0.0 0.01 0.01
Lithuania 0.1 0.1 0.0 0.04 0.07
Croatia 0.1 0.0 0.1 0.3 0.18
Note Israel, Estonia, Lithuania and Croatia figures are extracted from UNSD, Comtrade database (for 1998-2000).
Source : WTO Secretariat calculations, based on data provided by the Bulgarian authorities.
                                                     
9 An agreement with Latvia was concluded in April 2003.WT/TPR/S/121 Trade Policy Review
Page 46
Table III.4
MFN and preferential tariffs, simple average, by WTO product definitions, 2002
(per cent)
Preferential tariffs
CEFTA BalticsMFN
applied
EU
EFTACzech
Hungary
Poland
RomaniaSlovakiaSlovenia
Croatia
Estonia
Lithuania
Latvia
(2003)
Israel
Macedonia
Turkey
All products 11.5 4.0 4.3 2.5 2.6 2.5 2.6 2.5 2.6 4.4 4.9 4.8 4.9 5.9 5.0 4.9
HS 01-24 21.6 17.6 18.8 11.0 11.6 10.9 11.4 10.8 11.5 11.7 21.3 21.1 21.7 21.5 21.6 21.6
HS 25-97 8.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.3 0.1 0.0 0.0 1.3 0.2 0.0
WTO agriculture 22.4 17.5 20.9 12.2 12.8 12.1 12.7 12.0 12.7 13.1 22.1 22.1 22.1 22.0 22.0 22.1
Animals and products 24.5 21.1 24.4 14.9 16.6 15.3 15.5 13.6 15.5 16.6 24.5 24.5 24.3 24.5 24.5 24.5
Dairy products 34.0 33.7 34.0 30.0 32.2 32.2 32.2 30.0 32.1 32.2 34.0 34.0 32.9 34.0 34.0 34.0
Coffee and tea, cocoa, sugar 28.9 20.2 22.1 14.3 14.6 14.7 15.2 14.3 15.2 15.2 28.9 28.9 28.7 28.9 28.9 28.9
Cut flowers, plants 7.3 0.8 7.3 4.6 4.6 4.6 4.6 4.6 4.6 4.6 7.3 7.3 8.1 5.5 7.3 7.3
Fruits and vegetables 26.6 19.9 26.6 10.8 11.5 9.4 11.4 10.8 11.5 11.6 26.6 26.6 27.5 26..5 26.6 26.5
Grains 15.2 14.6 15.2 2.8 2.8 2.8 2.8 2.8 2.8 2.8 15.2 15.2 11.6 15.2 15.2 15.2
Oil seeds, fats and oils 10.1 2.9 9.6 2.1 2.1 2.1 2.1 2.1 2.1 2.1 10.1 10.1 11.2 10.1 10.1 10.1
Beverages and spirits 24.5 23.8 23.8 18.5 18.5 18.5 18.5 18.5 18.5 18.5 24.5 24.5 24.7 24.5 24.3 24.5
Tobacco 30.0 30.0 30.0 30.0 30.0 30.0 30. 0 30.0 30.0 30.0 30.0 30.0 31.2 30.0 30.0 30.0
Other agricultral products n.e.s. 8.1 3.1 4.9 0.4 0.4 0.4 0.4 0.4 0.4 2.0 6.3 5.8 4.8 5.8 5.8 5.8
WTO non-agriculturea8.7 0.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.1 0.4 0.4 0.5 1.7 0.6 0.5
Fish and fishery products 11.5 11.4 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 9.5 8.1 11.3 11.5 11.5 11.5
Minerals 8.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.8 0.0 0.0 0.0 1.9 0.1 0.0
Metals 6.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.4 0.0 0.0 0.0 0.0 0.3 0.0
Chemicals 7.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.0 0.0 0.0 0.7 0.0 0.0
Leather, rubber, footwear 10.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 3.9 0.0 0.0 0.0 3.0 0.0 0.0
Wood, pulp, paper and furniture 8.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.3 0.0 0.0 0.0 0.0 0.0 0.0
Textile and clothing 16.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.4 0.0 0.0 0.0 5.0 0.0 0.0
Transport equipment 6.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.6 0.0 0.0 0.0 0.0 0.0 0.0
Non-electric machinery 5.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.1 0.0 0.0 0.0 0.0 0.0 0.0
Electric machinery 7.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.5 0.0 0.0 0.0 0.0 0.3 0.0
Non-agricultural articles n.e.s. 6.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.8 0.0 0.0 0.0 0.0 0.0 0.0
Petroleum 17.4 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 5.7 0.0 0.0 0.0 7.8 9.1 0.0
a Excluding petroleum.
Source: WTO Secretariat calculations, based on data provided by the Bulgarian authorities.
(g) Other tariff exemptions and concessions
21. Bulgaria's Customs Act and implementing regulations contain provisions for duty-free entry
of goods.  These include:  goods of negligible value; personal belongings;  goods imported by
passengers;  goods intended for performance of public or commercial activities;  and documents.Specific provisions provide for the duty-free entry of arms, accoutrements, and special equipment for
the needs of the Ministry of Defence, the Ministry of Interior, and other agencies. These provisions do
not limit the possibility of duty-free entry in accordance with the international agreements and
programmes for cooperation in which Bulgaria is a Party.Bulgaria WT/TPR/S/121
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Box III.2:  Bulgaria's preferential agreements
(Data are for 2002, except in the case of Latvia)
(a) Regional agreements
Bulgaria has regional free-trade agreements with the European Union; EFTA (Norway, Iceland, Liechtenstein,
and Switzerland); CEFTA (Czech Republic, Hungary, Poland, Romania, Slovakia, Slovenia, and Croatia as of1 March 2003); the Baltic states of  Estonia, Latvia, and Lithuania;  the Former Yugoslav Republic ofMacedonia; Israel; and Turkey.
In general, industrial products classified in HS chapters 25-97  are given duty-free entry into Bulgaria,
subject to compliance with rules of origin (see Box III.3).  Zero tariff rates are applied on industrial goodsimported from EU, EFTA, CEFTA, Turkey, and the Baltic countries. A limited number of products in HS 25-
97, are treated as agricultural, and are subject to non-zero tariffs, as follows:
EU, EFTA: 8 tariff lines in chapters 29,  33 and 35CEFTA: 5 tariff lines in chapters 33 and 35
Turkey: 15 tariff lines in chapters 33, 35 and 38
Estonia: 34 lines in chapters 29, 33, 35 and 38Latvia: 25 lines in chapters 29, 33, 35, 38, 45, 52, 53Lithuania: 15 lines in chapters 29, 33, 35, 38, 45, 52, 53
In 2002, the following industrial goods imported from countries with which Bulgaria has preferential
agreements did not enjoy zero tariff rates:
FYROM: 147 tariff lines in chapters 27, 33, 35, 38, 72, 76, 84 and 85
Israel: 1,079 tariff lines in chapters 27, 28, 31, 33, 34, 35, 38, 39, 40, 42, 43, 51, 52, 55, 57, 58, 60,
61, 62, 63, 64, 69, 70, 84, 85 and 87
Croatia: 2,224 tariff lines in chapters 27, 28, 29, 30, 31, 33, 34, 35, 36, 37, 38, 39, 40, 42, 43, 44, 48,
50, 51, 52, 53, 54, 55, 56 57, 58, 60, 61, 62, 63, 64, 68, 69, 70, 72, 73, 76, 78, 82, 83, 84, 85,
87, 90, 93, 94, 95 and 96
As from 1 January 2003, all imports of industrial goods from Croatia are duty free
For agricultural goods classified in HS chapters 1-24 , duty-free or reduced-rate access is granted to a
positive lists of products, again subject to RoOs.  Thes e vary considerably among the agreements, as follows:
EU: 489 duty-free tariff items (9-digit level) in chapters 01, 02, 04, 05, 06, 07, 08, 09, 10, 11, 12,
13, 14, 15, 18, 20 and 23
17 tariff lines (9-digit) with reduced (mixed) preferential rates, in chapter 2263 items on which duties are differentiated on a seasonal basis (classified with four
exceptions at the 9-digit level), mostly with out-of-season duties at zero, in chapters 02, 04,06, 07, 08, 09, 12, 15, 16 and 23
34 groups of products on which tariff quotas are maintained, from chapters 02,04, 07, 08,
10, 15, 16, 17, 18, 20,22, 23 and 24
EFTA: 33 items (classified at four-, six- or nine-digit level) with reduced preferential rates, of
processed food and agricultural goods in chapters 15, 18, 19, 21 and 22
13 items (classified at four- or nine-digit level) with duty free access, for fish and fish
products in chapters 02, 03, 15, 16 and 23
CEFTA: 179 items (at four-, six- or eight- digit level, with duty-free access for all CEFTA members in
chapters 01, 02, 03, 05, 06, 07, 08, 09, 10, 11,  12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 and
23
143 items, similarly classified, with reduced tariffs (or the MFN rate if that is lower than the
rate indicated) in chapters 01, 02, 03, 04, 07, 08, 09, 10, 11, 12, 15, 16, 17, 18, 19, 20 and 21WT/TPR/S/121 Trade Policy Review
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For individual CEFTA members, reduced rate tariff quotas:
Czech and Slovak Republics: 77 items, of which 54 with defined tariff quotas for the Czech
Republic and 38 for Slovakia, and the rest "unlimited quantities", in chapters 02,04, 07, 11,16, 17, 18, 19, 20, 21 and 22
Hungary: 46 items, of which 43 with defined tariff quotas, in chapters 02, 04, 06, 15, 17, 19,
20, 21, 22 and 24
Poland: 63 items, of which 48 with defined tariff quotas, in chapters 02, 04, 07, 08, 11, 16,
18, 19, 20, 21 and 22
Romania: 20 items, of which 16 with defined tariff quotas, in chapters 04, 07, 15, 20 and 22Slovenia: 23 items, all with defined tariff quotas, in chapters 04, 06, 19, 20, 21, 22 and 24
Turkey: Reduced-rate tariff quotas on 59 items, mainly at six- or eight/nine digit level, in chapters
02, 04, 06, 07, 08, 15, 16, 17, 19, 20, 21, 22 and 24; three items in Chapter 08 with"unlimited quantity", the rest with defined quotas.
Estonia: Reduced rate tariff quotas covering 92 items, with defined quotas for 47 items and the rest
"unlimited quantity", in chapters 02, 03, 04, 09, 16, 17, 18, 19, 20, 21 and 22
Latvia: (2003) Duty-free on reduced rate tariff quotas covering 50 items with defined quotas for 43 items
and 7 "unlimited quantity", in Chapters 03, 04, 07, 11, 16, 20, 21 and 22.
Lithuania: Reduced-rate tariff quotas covering 113 items, with defined quotas for 22 items and the rest
"unlimited quantity", in chapters 01, 02, 03, 04, 07, 16, 17, 18, 21 and 22
FYROM: Duty-free or reduced-rate tariff quotas on 53 items, at 4-,6- or 9-digit level, in chapters 02,
04, 07, 08, 10, 12, 15, 16, 17, 18, 19, 20, 21, 22 and 23:  one item (HS 2202) with"unlimited quantity"
Israel: Duty-free or reduced-rate tariff quotas on 47 items, mainly at six- or eight/nine digit level,
in chapters 01, 06, 07, 08, 20 and 21; defined quotas for 34 items, the rest with "unlimited
quantity"
Croatia: Zero rates on 179 items, mainly at four- or six- digit level, in Chapters 01, 02, 03, 05, 06,
07, 08, 09, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22 and 23
Defined maximum rates on 143 items in chapters 01, 02, 03, 04, 07, 08, 09, 10, 11, 12, 16,
17, 18, 19, 20, 21 and 22
(b) Generalized System of Preferences
Bulgaria's GSP scheme applies to 71 developing countries and 49 least developed countries. It covers 280
tariff lines (nine-digit level) of industrial products in HS chapters 25-97 and 489 tariff lines of agriculturalproducts in HS chapters 1-24.  Developing countries are granted reduced rates of duty ranging from 2% to
40% of the MFN rate, depending on the product:  imports from LDCs are extended duty-free treatment.
Source : Information supplied by the Bulgarian authorities and UNCTAD (2002), Generalized System of 
Preferences, Handbook on the Scheme of Bulgaria  (UNCTAD/ITCD/TSB/Misc.67, April 2002)
22. In addition to goods covered by the WTO Agreement on Trade in Civil Aircraft and the
Information Technology Agreement, special provisions for suspension of customs duties are
envisaged in the Decree of the Council of Ministers adopting the Combined Nomenclature and the
Integrated Customs Tariff of Bulgaria.10 They concern pharmaceutical substances covered by the CAS
RN (Chemical Abstracts Service Registry Number s), the international non-proprietary names (INNS),
salts, esters and hydrates of INNS and pharmaceutical intermediates.11 In addition, the Council of
Ministers has the power to adopt autonomous tariff suspensions and quotas.
                                                     
10 Decree No. 289 of 2 December 2001.
11 Decree of the Council of Ministers No. 289/20.12.2001, Annex 6.1 to Annex 6.4.Bulgaria WT/TPR/S/121
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(h) Tariff quotas
23. Bulgaria maintains three types of tariff quota:  (i) quotas applied on an MFN basis under the
WTO Agreement on Agriculture, providing for zero or reduced duty rates for in-quota imports;(ii) autonomous quotas, also on an MFN basis, at ze ro or reduced rates of duty on a basis of temporary
suspensions year-by-year or for part of the year to cover shortfalls in the domestic market;  and
(iii) quotas applied under free-trade arrangements.
24. Bulgaria notified administration of its MFN tariff quotas for 1997 and imports under tariff
quotas for 1997 and 1998 to the WTO Committee on Agriculture in February 2000.
12  At that time
there were 73 product groups under tariff quota, mainly in HS Chapters 02 (meat), 04 (dairy
products), 07 (vegetables), 08 (fruit), 10 (grains), 12 (oilseeds), 15 (oils and fats), 16 (meat
preparations), 17 (sugar and confectionery), 18 (chocolate and cocoa), 19 (baked goods), 20/21
(processed vegetables and fruit), 22 (beverages, wines and spirits), and 24 (tobacco).  Currently, 45 of
these quotas remain in effect (Table AIII.1). All tariff quotas are allocated on a first come, first servedbasis. In four cases, tariff quotas are allocated by quantity between EU and other suppliers. Because
the applied rate of duty in Bulgaria is frequently lower than the bound rate on which TQs are opened,
there are currently 27 cases where the applied MFN rate is either lower than or equal to the in-quota
bound rate and hence the tariff quotas does not apply.
25. Autonomous tariff quotas vary greatly from year to year.  Table III.5 illustrates such tariff
quotas for the period 2000-03.  After 1997, autonomous tariff quotas apply only to certain agricultural
products; all are allocated on a first-come, first-served basis.
26. Preferential tariff quotas at duty-free or reduced rates are also applied under the agreements
between Bulgaria and the EU, EFTA, CEFTA and other countries (see Box III.2).
Table III.5
Autonomous tariff quotas/temporary duty suspensions, 2000-03
Product
(ex four-digit level)2000 2001 2002 2003
ex 0203 Pig-meat XaXaXa
ex 0206 Frozen pork livers X Xa
0209 Pig fat X X X
ex 0402 Powdered milk not over 1.5% fat X
ex 0407 Ostrich eggs X X X
ex 0713 Kidney beans, pea beans, lentils X
(part-year)X
(part-year)X
(part-year)
ex 0803 Plantains, bananas X
ex 0901 Coffee, not wasted, decaffeinated X
ex 1001 Wheat and meslin X X X
ex 1003 Barley X X
ex 1005 Maize X X
ex 1006 Rice Xa
ex 1007 Grain sorghum, hybrid, for sowing Xa
ex 1101 Wheat flour X
(part-year)
ex 1107 Malt and gluten X X X
ex 1108 Maize starch for pharmaceutical use X X X
Table III.5 (cont'd)
                                                     
12 See WTO documents G/AG/N/BGR/1 and 3, 2 and 15 February 2000.  See also GATT (1994)
Schedule CXXXIX, Section 1-B.WT/TPR/S/121 Trade Policy Review
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Product
(ex four-digit level)2000 2001 2002 2003
ex 1206 Sunflower seeds X
(part-year)X
(part-year)
ex 1209 Cucumber, carrot and cabbage seeds
ex 1210 Hop cones Xa
ex 1302 Hop extracts Xa
ex 1511 Palm oil X
ex 1512 Sunflower seed oil X
(part-year)X
(part-year)
ex 1513 Coconut oil X
ex 1803 Cacao paste, defatted, X
ex 1804 Cacao butter, fat and oil
ex 2308 Apple waste for pectin extraction Xa
ex 2309 Preparations for animal feed Xa
ex 2403 Smoking tobacco X
a One tariff line only.
Source: Information provided by the Bulgarian authorities.
(iii) Rules of origin
27. Bulgaria applies both non-preferential and preferential rules of origin. The former are set out
in the Customs Act13, and the Implementing Regulation to the Customs Act14, the latter are contained
in the respective preferential agreements .
28. Bulgaria’s non-preferential rules of origin assign the origin of goods to the country where
they were wholly obtained or produced. Goods whose production involves more than one country aredeemed to originate from the country where th ey underwent  the "last substantial economically
justified working or processing in an undertaking equipped for that purpose and resulting in the
manufacture of a new product". These rules are aligned with those of the EU.
29. Bulgaria's preferential rules of origin apply to free-trade-area partners and to imports under
the GSP scheme. The rules within the framework of FTAs are harmonized. Since January 1997,
Bulgaria has been participating in the Pan-European Cumulation System (Box III.3) and currently
applies the same rules to all the regional trading partners included in the system (EU, EFTA, CEFTA,
the Baltic States, and Turkey). The implementation of this origin network has two major
consequences. Firstly, semi-finished products originating in any of the countries of the system, which
are further processed or assembled in any other partner country, are considered as originating
products. Secondly, the respective products can be trad ed between any of the countries involved in the
system. As a result, customs procedures have been simplified. Once a product has acquired originwithin this European-wide system, there is no need  for the origin to be determined again. Whether
the origin of a product is retained or changed, depends on the degree of further processing in another
country of the system. When processing is beyond minimal operations the product acquires the origin
of the country of its last processing. In case of minimal operations the origin is allocated to the
country that accounts for the highest value added. With the other preferential trading partners, such asIsrael and FYROM, which do not participate in the pan-European system, the rules are aligned with
the standard protocols contained in the relevant FTAs, and differ only in respect of cumulation, which
is limited to bilateral only.
                                                     
13 Articles 29-32.
14 Articles 39-47.Bulgaria WT/TPR/S/121
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Box III.3 : The pan-European system of origin
Since the beginning of 1997 rules of origin (RoO) based on the concept of pan-European cumulation have been
applied in free-trade agreements (FTAs) within Europe.  Through these provisions, separate free-trade areas have been
merged into a Europe-wide network.  The participants in the system are the members of the European Union (including
Andorra, San Marino, Ceuta, an d Mellila), Bulgaria, Czech Repu blic, Estonia, Hungary, Iceland, Latvia, Liechtenstein,
Lithuania, Norway, Poland, Romania, Slovak Republic, Slovenia, Switzerland, and Turkey.
The three basic aspects of the system are that: (i) originating products can be freely traded between any of the
countries involved in the system; (ii) semi-finished materials originating in any country of the system and that are furtherprocessed or assembled in any other partner country are considered as originating products;  and (iii) a tolerance rule isapplied to third-country materials.
Advantages of the system of cumulation of origin for producers and traders include the simplification of
customs procedures (once a product has been given “European origin” there is no need for the origin to be verified again),
and greater freedom, within the group, in using input material or deciding in which country to invest production and
export facilities.
While in practice there is only one cumulation system, complete harmonization of all the RoO Protocols has not
been possible and at least three types of Protocol co-exist: one applies to the European Economic Area (EEA) and
provides for full cumulation of origin among all members; one applies to trade among EFTA countries; and a third appliesto other FTAs covered by the system.  The second and third systems provide for bilateral and “diagonal” cumulation (i.e.cumulation of origin for products originating in other participating countries)
Under the European agreements, originating products are defined in accordance with two basic requirements:
− Products wholly obtained in the EU, EEA or another partner country (participating countries) are classed as
originating. Wholly obtained products are defined in Article 4 or 5 of the Protocols and are generallyagricultural, fisheries or mining products. For goods not wholly obtained, originating status is granted if
imported materials have undergone sufficient working or processing in one of the participating countries; the
cumulation rules soften this requirement, as explained below. Annex II to the RoO Protocol contains, for eachtariff heading, a harmonized list of working or processing required to be carried out on non-originating materialsin order for the manufactured product to be granted originating status.
− The list of working or processing requirements makes use of all three main methods (change in tariff heading,
percentage of value added in the exporting country, and technical test) used for conferring origin, and in  many
cases requires the fulfilment of more than a single criterion. For products classified under Chapters 28, 29, 31-39, 84-91 and 94, an additional criterion is also provided, which in all cases provides for an import content test.In cases where the first method also provides for an import content limitation, the alternative criterion alwaysprovides for a lower limit of non-originating products.
Two other principles also apply in determining origin under the pan-European system:
− The tracing test  concept means that all processing done in countries participating in a cumulation system counts
towards the granting of origin.  When a non-originating ma terial fails to acquire originating status after being
processed, the input does not become 100% non-originating; rather, the value of originating materials and
processing still count towards the determination of origin of the final product.
− The tolerance rule  allows the use of materials supplied by countries outside the cumulation system that would
otherwise not be accepted; it is usually expressed as a maximum percentage of non-originating materials.
The cumulation rules waive the “sufficient working or processing” requirement of bilateral agreements, with
originating status being granted once the working or processing carried out in a particular participating country goesbeyond certain specified de minimis  operations. Even if transformation is not beyond de minimis , origin can still be
granted to a particular country provided the value added there is greater than the value of the materials used originating in
any one of the other participating countries.  If that is not the case, the final product is regarded as originating from the
country that accounts for the highest value of originating materials used in the final manufacture.
The full cumulation provided for in the EEA modifies a few aspects of the provisions explained above.  First, in
the context of the agreement, products are counted as being of EEA origin, rather than of national origin from any
individual party to the EEA.  Second, and more importantly, processing requirements do not apply to each of the EEApartners individually but to the area as whole, which means that processing in different partners can be combined to countfor EEA origin.  The value added of all processing is counted in the final determination of origin, including all processingof non-originating material and operations that are de minimis .
Source : WTO document WT/REG/W/45.
30. Under Bulgaria's GSP scheme (Box III.2), orig inating products must be wholly obtained or
sufficiently worked or processed in the benefici ary country (with originating content comprising atWT/TPR/S/121 Trade Policy Review
Page 52
least 50% of the ex-works price); must be transported directly to Bulgaria or be under customs
surveillance if passing through a third country; and must be covered by GSP certificate "Form A".15
(iv) Other duties and taxes
31. Bulgaria's current value added tax legislation entered into force on 1 January 1999 and in
many respects follows the provisions of the sixth VAT Directive of the EU.16 The tax and customs
administration of the Ministry of Finance is responsible for the administration of the VAT. All
persons (legal or physical, residents or non-residents) with a taxable turnover of at least 50,000 levs
(as of 1 January 2003) during the preceding twelve months are obliged to register for VAT purposes.
32. Two VAT rates are applicable: 20% on taxable supplies, including imports of goods and
services; and a zero rate, applicable on exports.17 The tax base is the price invoiced to customers,
which combines manufacturing costs with other taxes, fees, excise duties, subsidies and related
financing charges, interest and penalties, expenditures for packaging, shipping and handling, and the
like.
33. Only a few imported commodities are exempt from VAT, as stipulated under Article 59 of the
Act. These can be broadly categorized as (i) supplies provided outside the territory of Bulgaria; (ii)
supplies of goods in customs warehouses as governed by the respective customs procedure; and
(iii) supplies exempt due to their use. The third category of supplies includes: financial services,
insurance services, transfer of a going concern of a company, as well as businesses or parts thereof asper the Privatization Act, betting and gambling, and donations in favour of certain charity institutions.
34. Excise duties are levied on goods considered to be damaging to the health of the population
and or the environment, luxury items, and items related to gambling (Table III.6).
18 They apply both
to goods produced in Bulgaria and to imports. Duties are calculated either by quantity, or as a
percentage of the value of the chargeable goods. Exports are exempted from excise duties.19
                                                     
15 See document UNCTAD/ITCD/TSB/Misc.67, April 2002.
16 Including the adoption of the EU definitio n of place of supply of goods and services.
17 Under the VAT Act, exports are defined to include the exportation of goods abroad or to free zones,
free warehouses, and duty-free outlets. The transportation of goods between free zones and free warehouseswithin Bulgaria is considered to be international transport, hence it is also exempted from VAT. Other servicesrelated to international transport, such as forwarding or  agent services and sales of tickets for international
flights, etc. are also considered exports of services. From 2002, the transfer of rights in computer products by
registered local producers to foreign persons may, under certain conditions, qualify as exports.
18 Under various Acts and regulations Bulgaria is required to levy taxes on imports and domestic
production of car petrol, diesel fuel, boiler fuel oils, and gas oils for industrial use.
19 The Excise Duties Act provides for reimbursement of excise duties upon exportation of goods, on
which excise duties have been paid, when excise stickers have been paid but not used by producers.Bulgaria WT/TPR/S/121
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Table III.6
Excise duties in force as of 1 January 2003
Products Excise Tax
1. Beer 1.05 levs per hectolitre by Plato degree20
2. Wine 0 levs per litre
2а. Intermediate products 90 levs per  1 hectolitre
3. Alcoholic drinks 0.05 levs per alcohol degree
4. Tobacco products
4.1. Filter-tipped cigarettes 0.002 levs per pc. + 40%of the sale price
4.2. Non-filter cigarettes 0.001 levs per pc. + 15% of the sale price
4.3. Tobacco for rolling, pipe, chewing and snuff 4.5 levs per 100 gram + 10% of the sale price
4.4. Cigar 1 levs per 1 pc. + 10% of the sale price
4.5. Cigarillos 0.20 levs per 1 pc + 10% of the sale price
5. Alcohol containing raw materials 0.02 levs per 1 alcohol degree
6. Coffee
6.1. Roast coffee – all types 1.3 levs per 1 kg
6.2. Not roast coffee – all types 1 levs per 1 kg
6.3. Extracts of coffee 3.5 levs per 1 kg
6.4. Powder mixtures containing extract of coffee over 10% 1.3 levs per 1 kg
7. Tea (with exception of herb and fruit) 40%
8. Passenger automobiles, freight-passenger and racing
automobiles for not more than 9 persons, including the driver,with engine power:
- over 120 (kW) according to DIN system
Up to 150 kW 35 levs per 1 kW
over 150 kW 60 levs per 1 kW
- over 126 kW according to SAE system
Up to 157.5 kW 33.33 levs per 1 kW
over 157.5 kW
Recalculation of the engine power of automobiles from kW to
horsepower is at the ratio of 1 kW=1.36  horse powers.57.14 levs per 1 kW
9. Engine petrol
9.1. Aviation petrol 325 levs per ton
9.2. Car petrol
9.2.1.Lead free:
with octane number less than 98with octane number 98 or higher400 levs per ton
600 levs per ton
9.2.2.Lead-containing:
with octane number less than 98with octane number 98 or higher400 levs per ton
650 levs per ton
10. Petrol for technical use, petrol fractions for processing and
production of car petrol and other hydrocarbons300 levs per ton
11. Medium oils including kerosene for jet engines and lighting
gas325 levs per ton
12. Heavy oils for processing,
heavy fuels and boiler fuel oils25 levs per ton
13. Gas oils – all types, including diesel fuel, fuel for ship engines
and fuel for industrial and other public (household) caldrons,
furnace and equipment210 levs per ton
14. Toluene 435 levs per ton
15. Oil gas and other gaseous hydrocarbons 120 levs per ton
16. Gaming machines, gaming tables, and other equipment for
gaming in a casino15%
Source: Bulgarian authorities.
                                                     
20 Plato degree is a measure of sugar content in beer.WT/TPR/S/121 Trade Policy Review
Page 54
35. Bulgaria does not apply any customs clearance fees on imports.
(v) Import surcharges
36. Currently, Bulgaria does not levy any surcharges on imports. A temporary import surcharge
was maintained from 4 June 1996, with a scheduled elimination by 30 June 2000.21  Goods exempted
from the surcharge were: crude oil, natural gas, elec trical energy, coal and briquettes, lignite, coke,
nuclear fuel, copper oils and concentrates, unwroug ht aluminium, chemical s, wood and pulp, polyvinyl
chloride, cotton, medicaments, raw cane sugar, wheat , maize for forage, and wheat flour. The import
surcharge was eliminated ahead of schedule on 1 January 1999.22
(vi) Customs valuation and preshipment inspection
37. Bulgaria is a signatory to the WTO Agreement on Customs Valuation. The Customs Act
provides the rules for determining the valuation of goods. The import value for duty purposes is
measured c.i.f. (cost, insurance and freight) and is denominated in levs using published Bulgarian
National Bank exchange rates. The primary basis for determination is the transactions value, i.e. the
price actually paid or payable for the goods when sold for export to the customs territory of the
Republic of Bulgaria. Normally, the transaction value is the invoice price plus some other expenses,
such as packaging and container costs, and minus expenses such as transport costs incurred on arrival.
The transactions value can be rejected by customs if, inter alia , the buyer and seller are related.23  If
the customs value cannot be determined on the basi s of the transaction value, then the following
alternate valuation methods are used: transaction value of identical goods; transaction value of similar
goods; deductive method (resale price less such costs such as customs duties, taxes, and
commissions); and computed value, derived from costs of production, profit, and other expenses.
Provided that they are shown separately, interest charges are not included in the customs value. Under
Article 220 of the Customs Act, rights of appeal are open through the Administrative Procedure Act.24
38. Bulgaria does not use preshipment inspection procedures to verify declared values.
(vii) Local-content and local-purchase requirements
39. There are no specific provisions in the Bulgarian trade and trade-related legislation that
require investors to meet prescribed local-content or local-purchase levels.
(viii) Import prohibitions, restrictions, and licensing
40. In accordance with its international obligations, Bulgaria prohibits imports of ozone-depleting
products, ivory, rare birds, and other internationally banned products.
41. Importation of other goods into Bulgaria is generally carried out without the need for licences,
except for a few commodities. Council of Ministers Regulation No. 233 provides the legal framework
for the application of both automatic licences (registrations) and non-automatic licences (permits).25
                                                     
21 State Gazette  No. 48/1996.
22 See WTO documents W/BOP/R/43 and WT/BOP/R/44. This surcharge succeeded a surcharge
maintained between 1991 and 1996.
23 I.e., if in the light of the information provided by the declarant or otherwise, the customs authorities
have grounds for considering that the relationship influenced the price.
24 State Gazette  No. 90/1979, as last amended in State Gazette  No. 15/1998.
25 Published in the State Gazette  No. 93/2000; Amended in State Gazette  No. 86/2002 and
No. 110/2002.Bulgaria WT/TPR/S/121
Page  55
Since November 2002, automatic licences (registrations), which were applied mainly for statistical
and monitoring purposes, have been abolished.26  In relation to non-automatic licences (import
permits), the competent authority can issue one or more permits for each foreign trade transaction.Import permits are valid for three months from the date of issue and apply to imports from all sources.
42. Import permits are applied to monitor trade in arms and ammunition and protect human,
animal, and plant health and life.  Most such items are covered by international conventions such as
the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances,
the Basle Convention on hazardous wastes, the CITES Convention, and the Montreal Protocol andrelated agreements on the protection of the ozone layer. The complete list of goods requiring non-
automatic licences (permits) is provided in Table III.7.   
Table III.7
Goods requiring non-automatic licences
Bulgarian Customs Tariff No. Description of products
1 Nuclear materials, radioactive substances and other sources of ionizing radiation
2 2524, ex. 6811,
6812, ex 6813Asbestos, asbestos products and asbestos containing materials and products
3 ex. 490700,
ex. 4911Polygraph production for public supply, which can be used as securities
4 from Chapter 36,
ex.290420001Powder, explosive and pyrotechnical materials and products thereof of civil application,
Trinitrotoluene (TNT)
5 ex. 9013
ex 930400000Telescopic sights and laser targets, gas spray
6 ex 9303,
ex 930400000, ex 9305, ex 9306
and ex 95069990Smooth-barrel weapons, weapons using only ammunition with peripheral inflammation
and pneumatic weapons for hunting and sports purposes and unadjusted to fully
automated fire, gas- and signal-guns and revolvers and ammunition for these.
7 Medicaments for human medicine
8f r o m  C h a p t e r  2 8
from Chapter 29
ex 3808Products for plant protection
9 Veterinary-medical products
10 Live game and its genetic material
11 Wild flora and fauna species included in the Washington Convention on International
Trade in Endangered Species of Wild Fauna and Flora (CITES), including live or dead
species as well as parts and products thereof.
12 Alien flora and fauna species designated for propagation and breeding (except for some
parrot species)
13 Military and special production and products and technologies of possible dual (civil and
military) use
14 Narcotic and psychotropic substances
15 Chemical substances under control used for the production of  narcotic and psychotropic
substances
16 Goods the importation of which is regulated by intergovernmental agreements and
protocols and generates budget expenditure
17 Certain types of wastes according to the Basel Convention on hazardous wastes
18 Ozone-depleting substances, according to the obligations of Bulgaria under the Montreal
and Kyoto Protocols, implemented under Council of Ministers Regulation No 254 of
1999
Source: Bulgarian authorities.
43. Permits are administered by the competent authority with respect to the particular good
subject to the import licence. For each type of good th ere exists only one such authority. For instance,
licences for nuclear materials and radioactive substances are issued by the Nuclear Regulatory
                                                     
26 When automatic licences were in force, the Ministry of Economy was the administering institution.WT/TPR/S/121 Trade Policy Review
Page 56
Agency; and licences for wild and alien flora and fauna species, as well as wastes and ozone-layer-
depleting substances, are issued by the Ministry of Environment and Waters.27
44. Any registered natural person or legal entity may apply for a licence, in writing. The
application must be made before importation and is granted within five days after its submission to
the competent authority. Applicants who are refused a licence have a right of appeal under the Law on
Administrative Procedure. In some cases, documents certifying the fulfilment of the conditions under
which the transaction is allowed may be required. Licensing fees are charged to cover administrative
expenses on the processing of documents and are independent of the value of imports or exports.
(ix) Anti-dumping and countervailing actions
45. During its process of accession to the WTO, Bulgaria introduced legislation on anti-dumping
and countervailing actions in conformity with WTO Agreements.28 The relevant legislation
(Regulation No. 287) was notified to the WTO in March 1997.29
46. Anti-dumping or countervailing actions can be initiated upon written complaint to the
Ministry of Economy by any natural or legal person, or by any association not having legal
personality but acting on behalf of a Bulgarian industry. The written complaint must contain sufficient
evidence of the existence of dumping or subsidization as well as the resulting injury to the industry. A
decision to conduct an investigation of dumping or subsidy is made by the Council of Ministers, upon
a proposal from the Minister of Economy, within 45 days of the date of the complaint. Theinvestigation period allowed is 12 months, which may be extended for a further six months by
Council of Ministers’ decision. Provisional measures may be applied if a preliminary affirmative
determination has been made by an inter-agency commission
30 showing that the imported product
benefits from subsidies or is being dumped; and this action is of consequent injury to Bulgarian
industry. Under such conditions, the Council of Ministers, upon a proposal from the Minister of
Economy, may impose provisional anti-dumping or countervailing duties in order to prevent further
injury being caused during the period of the investigation. If the investigation confirms the existenceof subsidies or dumping and the resultant injury to Bulgarian industry, definitive countervailing or
anti-dumping duties are imposed. Duties imposed may not exceed the subsidy or dumping margin and
may not remain in force for more than five years from the conclusion of the investigation.
47. Bulgaria has so far not initiated any countervailing action. In January 2002, however, it
initiated its first anti-dumping investigation, with regard to the importation of bread yeast fromTurkey. This action has been duly notified to the Committee on Anti-Dumping Practices.
31 The
decision of the investigation commission was still pending in June 2003.
48. Since January 1995, 11 anti-dumping procedures ha ve been brought against Bulgaria by the
European Union and seven different countries32.
                                                     
27 The  Government authorities responsible for issuing import licences for different kinds of goods are
indicated in Annexes 1 and 2 to Council of Ministers Regulation No. 233.
28 WTO document WT/ACC/BGR/5.
29 State Gazette  No. 106/1996:  notified in WTO document G/ADP/N/1/BGR/1.
30 Ministers and heads of administrative bodies propose members to the investigation commission.
31 WTO document G/ADP/N/92/BGR.
32 Brazil, Canada, India, the Republic of Korea, Mexico, South Africa and Thailand.Bulgaria WT/TPR/S/121
Page  57
(x) Safeguard actions
49. Bulgaria introduced safeguard legislation in conformity with WTO disciplines during its
accession negotiations. Bulgaria's current legislation on safeguards, Regulation No. 300, waspublished in the State Gazette  No. 109/1996
33 and was notified to the WTO on 27 March 1997.34
50. A safeguard action may be initiated ex officio35, or upon request by a major proportion of
Bulgarian producers of a domestic industry of like or directly competitive products, or an association of
such producers.36 The request to initiate a procedure must  be submitted in writing to the Minister of
Economy.37 As with anti-dumping actions, requests are considered by an inter-agency commission
whose members are determined by the Minister of  Economy on the proposal of the relevant ministers
and heads of administrative bodies. The procedure is  initiated by an Ordinance of the Ministry of
Economy on the proposal by the inter-agency commission and an announcement to this effect is
published in the State Gazette . The procedure must generally be completed not later than nine months
from the date of its initiation; however, there is th e possibility of a two-month extension. During this
investigation period, provisional safeguard measur es may be imposed (i) under circumstances where
delays would lead to damages that would be diffic ult to repair and (ii) subject to a preliminary
determination that increased imports have caused or  are threatening to cause serious injury to the
relevant Bulgarian industry. The application of this  provisional measure may not exceed 200 days. In the
event of the inter-agency commission finding the produc t to be imported in quantities such as to cause or
threaten to cause serious injury to Bulgarian i ndustry, the Council of Ministers, upon recommendation
by the Minister of Economy, may introduce a sa feguard measure by adopting a Regulation. The
safeguard measure is to be applied only for such a period of time as may be necessary to prevent or
remedy serious injury caused to Bulgarian industry and to facilitate adjustment.
51. Since its accession to the WTO, Bulgaria has initiated six safeguard investigations. Two led to
the imposition of safeguard measures, while two were terminated for lack of sufficient evidence and the
results of the two other investigations are pending (Table III.8).
Table III.8
Safeguard actions taken by Bulgaria
Product Initiation Details Findings Details Measure imposed
Ammonium
nitrateState Gazette ,  No.92
10 November 2000
WTO G/SG/N/6/BGR/2Insufficient preconditions for the imposition of
safeguard measure: pursuant to Regulation No.52 of the Council of Ministers of 28.02.2001
(published in State Gazette  No. 20 of 6 March
2001) the provisional duty was terminated.Provisional duty on
imports – 40%
Crown corks State Gazette , No.98
16.11.2001
WTO G/SG/N/6/BGR/2Affirmative Determination (Regulation No. 255,
8.11.2002)Euro 1.5 per 1,000 pieces
Ammonium
nitrateState Gazette ,  No. 10
29 January 2002
WTO G/SG/N/6/BGR/3Affirmative Determination
(Regulation No. 315,  20.12.2002)Tariff quota of 40,960
tonnes and duty of $35/tn
in excess of quota
Urea State Gazette , No. 60
18 June 2002
WTO G/SG/N/6/BGR/4Insufficient evidence of serious injury
(Ordinance of the Minister of Economy No. RD-
16-03/08.01.2003)none
Table III.8 (cont'd)
                                                     
33 Issued on 27 December 1996.
34 WTO document G/SG/N/1/BGR/1.
35 The procedure is initiated ex officio  in cases of substantial evidence in support of trends in imports.
36 Article 4(1).
37 Article 4(2).WT/TPR/S/121 Trade Policy Review
Page 58
Product Initiation Details Findings Details Measure imposed
Certain steel
products
(from tariffheadings 7208,
7209 & 7213)State Gazette ,  No.73
26 July 2002
WTO G/SG/N/6/BGR/5Pending n.a.
Steel products
(from tariff
headings 7217
and 7317)State Gazette ,  No.33
11 April 2003
WTO G/SG/N/6/BGR/6Pending n.a.
Source: The Bulgarian authorities;  and WTO documents.
(xi) Government procurement38
52. During its accession to the WTO, Bulgaria announced its intention to accede to the
Agreement on Government Procurement, initially by seeking observer status and declared its intentionto complete negotiations by December 1997. Bulgaria is not yet a signatory to the Agreement, but
maintains its observer status. Recent progress on its bid to accede to the GPA includes submission of
an application for accession in September 2000.
39  Bulgaria provided replies to the checklist of issues
relating to its accession to the Agreement in April 2001. Bilateral and plurilateral consultations are
ongoing between Bulgaria and parties to the GPA as part of the accession process. Bulgaria wouldalso need to join the Government Procurement Ag reement in order to accede to the European Union.
53. Along with other aspects of the public-sector Bulgaria's public procurement policy is also
being reformed. During the centrally planned period, public procurement contracts were awarded
directly to state enterprises as there was no private sector. According to the Bulgarian authorities,
current reforms are aimed at increasing the efficiency of its budget and public resources, whilst
following the principles of transparency and non-discrimination, in order to create competitive
conditions and engender the supply of high quality goods and services.
54. The first major change in national public procurement occurred with the adoption of the Law
on Awarding State and Municipality Procurements in 1997. In June 1999 this law was repealed and
the current Public Procurement Law was passed. It has since been amended and expanded, twice in
November 2000 and twice in April 2002.
40 Some of the main amendments include: additions to the
list of services covered, including information technologies, investment projects and works control; amore precise list of contracting authorities including all hospitals spending central government or
local budget funds, the National Insurance Institute, the National Health Insurance Fund, and
diplomatic representations; the abolition of the requirement for a successful tenderer to be registered
under the Commercial Law of Bulgaria; and the simplification of documents requested from tenderers
and the complaints review procedures.
41
55. Public procurement contracts above the thresholds of 600,000 levs for construction work
contracts, 50,000 levs for supply contracts and 30,000 levs for services contracts are awarded through
                                                     
38 Information in this section is obtained largely from WTO document GPA/W/136 of 2 May 2001,
Bulgaria’s replies to the Checklist of Issues for provis ion of information relating to accession to the Agreement
on Government Procurement.
39 WTO document GPA/42; with reference to the process of the accession to the GPA, the Bulgarian
legislation in this field has been circulated to the Parties to the Agreement (WTO document GPA/49, 15 May2001).
40 State Gazette  No. 92/2000, No. 97/2000, No. 43/2002, and No. 45/2002.
41 USTR (2001) and (2002).Bulgaria WT/TPR/S/121
Page  59
three types of procedures42:  open, restricted or negotiation procedures. The procuring entity initiates
an open procedure in all cases, unless otherwise provided for in the law.  Use of another procedure is
allowed only when the initially announced procedure has been terminated without the conclusion of acontract.
56. Tenders are awarded on the basis of the most economically advantageous or the lowest price.
"Economically advantageous" comprises quality, technical, aesthetic, or functional characteristics;
technical support or guarantee service;  terms of performance;  and price and method of payment.
43
57. Invitations for participation in open public procurement procedures are published in the
Public Procurement Bulletin  and the Public Procurement Register  as well as in one local or national
newspaper.  Open procedures are adjudged by a special commission, which examines, evaluates, and
ranks tenders and transmits its decision to the processing entity;  this entity announces the top three
rankings, and awards the contract to the first-ranked tenderer;  if the contract is refused by the first
and/or second tenderer, the entity shall propose it to the second or third.
58. The restricted procedure  has two stages:  pre-qualification of suppliers, and evaluation of
offers by selected tenderers. The invitation for participation in the pre-qualification stage is published
in the Public Procurement Bulletin  and the Public Procurement Register  as well as one local or
national daily newspaper.44  A commission appointed by the procuring entity selects the suppliers;  it
assesses the applications and recommends that the procuring entity invite only those suppliers who
fulfil to the greatest extent the pre-announced requirements. The procuring entity sends invitations for
participation simultaneously to all selected suppliers and proceeds to the restricted procedure provided
that at least three suppliers confirm their intentio n to participate. Otherwise, the procuring entity
terminates the procedure and informs the suppliers in writing. Evaluation of tenders is carried out by
the commission according to the procedure provided for open tendering. The procuring entity
announces the top three rankings and awards the contract to the tenderer ranked first.
59. An invitation for participation in a negotiation procedure is addressed to one or more
suppliers selected by the procuring entity.  The invitation is published in the Public Procurement
Register . The suppliers submit tenders within the time-limit specified by the procuring entity, that is
not less than 15 calendar days before the date specified for carrying out the procedure. The procuring
entity proceeds in its own best interest in the negotiations.
60. In the Committee on Government Procurement, Bulgaria has indicated that it has liberalized
its market substantially, on an autonomous basis, by opening its procurement to foreign suppliers and
aligning its procurement legislation and procedures with the requirements of the GPA.  Bulgaria has
also requested repeatedly in GPA meetings that it be given information pertaining to export
opportunities in the procurement markets of Parties to the agreement as part of its accession process.
61. Tables III.9 and III.10 provide information on the trends in government procurement by
procedure and type of contracting authority.
                                                     
42 The 50,000 levs threshold also applies to contracts for joint supply of goods and services.
43 Article 41, para. 2 of the Public Procurement Law.
44 The aim of the pre-qualification stage is to invite participation only of suppliers with the necessary
economic and technical capabilities to performe the contract.  All suppliers interested in the procurement havethe right to submit applications to be invited to the pre-qualification stage. If no request or less than threeapplications have been submitted within the specified time-limit, the procuring entity may extend the deadlinefor submission of applications by not more than 30 days.WT/TPR/S/121 Trade Policy Review
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Table III.9
Government procurement by type of procedure
YearTotal number of
proceduresOpen proceduresRestricted
proceduresNegotiation
proceduresTotal value of
contracts signed (in
levs '000)
1999 773 585 110 78 193,366
2000 3,504 2,669 441 394 848,715
2001 4,501 3,356 390 755 849,150
2002 4,894 3,084 278 1,532 771,838
2003 (Jan-May) 962 603 47 312 62,561
Source : Information supplied by the Bulgarian authorities; and Bulgarian Public Procurement Register .
Table III.10
Government procurement by type of contracting authority
Total procedures
Type of contracting authority1999 2000 2001 2002 2003
(Jan-May)
Central state authorities 197 640 776 831 143
Regional authorities 9 9 9 2 0
Mayors of municipalities and districts 138 808 619 905 179
H i g h e r  s c h o o l s 2 46 26 68 02 4
National Health Insurance Fund 22 19 20 4 0
National Social Security Institute 6 6 8 7 5
Other authorities and organizations spending resources from the consolidated
state budget102 463 625 870 160
Non-profit organizations established by one or several state authorities and/or
local authorities.05350
Sole traders, public authorities or public undertakings  including those
constituted according to Article 62 of the Commercial Law when exercising
one or several of the utility activities on the basis of exclusive and special
rights including operating on the basis of concession or registration regime
granted by a competent authority.275 1 492 2375 2 190 451
Source : Information supplied by the Bulgarian authorities;  and Bulgarian Public Procurement Register .
62. Under Article 56 of the Public Procurement Law,  candidates participating in procedures for
the award of public procurements may file appeals with the court in conformity with the Law on
Administrative Proceedings and the Law on the Supreme Administrative Court. The procedure of
lodging a complaint is the same for domestic and foreign suppliers.45
63. Bulgaria's procurement law contains provisions for preferences for local suppliers in two
cases:  small or medium-sized enterprises or suppliers that have such enterprises as sub-contractors,
and qualified suppliers employing disabled people.  Procuring entities also have the right to include
additional performance requirements in decisions for initiation of a procedure, such as environmental,
unemployment, job creation for disabled workers, or use of local resources and raw materials in
certain regions; national security and public order conditions; or conditions relating to stimulation of
SMEs as sub-contractors.  Foreign contractors may sub-contract up to 50% of the total tender price,
but only to Bulgarian natural or legal persons (including foreign firms established in Bulgaria).46
64. New draft public procurement legislation was approved by the Council of Ministers in
July 2003 and is before parliament. In the draft, transitional price preferences are offered to small or
                                                     
45 See WTO document GPA/SPEC/21/Rev.1 for information on cases brought to the Administrative
Court.
46 GPA/W/136, question 15.Bulgaria WT/TPR/S/121
Page  61
medium-sized enterprises. The proposed preferen tial margin in 2004 is 15%, declining to 10% in
2005 and 5% in 2006.
(xii) Standards and other technical requirements
(a) Standards, testing, and certification
65. The Law on National Standardization47, the Law Amending and Supplementing the Law on
National Standardization48,  the Law on Technical Requirements to Products49, and the Law amending
and supplementing the Law on Technical Requirements for Products50, set forth the legal
requirements for product standards, testing, and certification. The State Agency for Metrology andTechnical Surveillance
51 is responsible for domestic implementation and administration of the WTO
Agreement on Technical Barriers to Trade, while the Ministry of Economy is in charge of
coordinating standards activities with the WTO. The Agency is also responsible for the designation of
conformity assessment bodies, with the exception of those for construction products, which are
designated by the Ministry of Regional Development and Public Works. The Executive Agency onCertification and Testing is the competent author ity for the conformity assessment, certification,
registration or testing of all products except pharmaceuticals, food products, and telecommunications
equipment. The Agency requires a Bulgarian translation of the certificate(s) of approval from the
corresponding national testing authority and the cert ificate identifying the testing protocol. The entire
testing and certification process requires at least one month.
66. The competent authority for pharmaceuticals is the Bulgarian Drug Agency in the Ministry of
Health. It establishes standards and performs testing and certification and is responsible for drug
registration. Placement on the market of radio equipment using frequency bands outside the National
Frequency Spectrum for Civil Uses is notified to the National Radio Frequency Spectrum Council and
to the Communications Regulation Commission. This equipment is subject to registration at the
Communications Regulation Commission.
67. Bulgaria is harmonizing its national standards with international or regional standards, in
particular with EU standards. The Bulgarian Institute for Standardization manages, coordinates, and
supervises the national standardization policy in compliance with international requirements. Bulgaria
is a participant in the International Organizatio n for Standardization (ISO) and the International
Electrotechnical Commission (IEC). As of July 2003, a total of 17,571 standards were in force in
Bulgaria, of which 9,995 were Bulgarian national standards, 6,469 European standards, and 1,107 ISOand/or IEC standards. Currently, 52% of EU standards have been implemented as Bulgarian
standards. Bulgaria's goal is to meet 80% of EU standards by 2004 and to become a full member of
the European Committee for Standardization (CEM).
68. In line with international practice and the provisions of the TBT Agreement, Bulgarian
standards are voluntary unless cited in technical regulations. Such regulations are applied to productsfor which safety is an issue such as food products, construction materials, medical devices, particular
electrical equipment, etc. These products are subject to testing, certification or prior approval
procedures. According to the Bulgarian authorities, an estimated 2% of norms are mandatory.
                                                     
47 State Gazette  No. 55/1999, amended in Nos. 108/2001and 112/2001.
48 State Gazette  No. 13/2002.
49 State Gazette  No. 86/1999, amended in Nos. 63/2002, 93/2002, and 18/2003.
50 State Gazette  No. 93/2002.
51 Formerly, the Committee on Standardization and Metrology.WT/TPR/S/121 Trade Policy Review
Page 62
Mandatory certification of products is carried out under the European Union's global approach
modules.52
69. Pursuant to the objective of separating accreditation functions from certification and
standardization, the Bulgarian Accreditation Service (BAS) was established in 1999 as an independent
national accreditation body.53 According to the authorities, the BAS provides accreditation services in
a transparent, independent, and non-discriminatory manner. The accreditations performed by the BAS
are based on the EN 45000 series of standards54, ISO/IEC 17000 series of standards, BDS EN
ISO/IEC 17025, and ISO/IEC guides and guidelines.
(b) Sanitary and phytosanitary arrangements
70. Bulgaria is a member of the FAO/WHO Code x Alimentarius Commission (Codex), the Office
International des Epizooties (OIE) and the FAO International Plant Protection Convention (IPPC).
Bulgaria is a member of the European Plant Protection Organization (EPPO), which is a regional
organization of FAO.
71. A series of sector-specific regulations and legislations have been adopted with the aim of
harmonizing Bulgaria's sanitary and phytosanitary standards with those of the EU. The National
Veterinary Medical Service is responsible for ensuring the optimum health environment for all live
animals and the safety of all food products of animal origin. A veterinary certificate is required for the
importation of certain animals, foodstuffs, and raw materials of animal origin. The Law on VeterinaryActivities allows for the imposition of sanitary measures on imports. Bulgaria has notified the WTO
of import bans on live bovines, sheep, and goats, a nd certain products from countries where BSE and
foot and mouth diseases are known to occur.
55
72. All imports of live animals are subject to mandatory quarantine, except pets and sport horses
with individual health passports issued pursuant to relevant internationally recognized norms.
Otherwise, depending on the animal species and the animal health situation of the country of origin
and other factors, the quarantine is effected under official veterinary control in specific farms, orspecial quarantine stations in the regions or at the border inspection post. In support of this inspection
regime the National Veterinary Medical Service has developed detailed surveillance programmes for
various animal diseases, including the development of an animal disease notification system. Bilateral
agreements for cooperation addressing standards, technical regulations, and conformity assessment
have been signed with: Russia, Ukraine, Mold ova, Kazakhstan, Georgia, Lithuania, Armenia,
                                                     
52 The "global approach" to certification and testing was introduced by the European Union in 1989 in
order to develop a consistent approach to conformity assessment in the standards area.  It generalizes the use ofEuropean standards relating to quality assurance (QA) (EN ISO 9000 series) and to requirements to be fulfilled
by conformity assessment bodies operating QA schemes (EN 45000 series).  The global approach introduced amodular approach dividing conformity assessment into  a number of modules defined according to the stage of
development of the products, the type of assessment involved and the person carrying out the assessment. See
EC (2000).
53 Decree of the Council of Ministers No.270/30.12.1999. The BAS is an executive agency of the
Ministry of Economy.
54 These are standards for requirements to be fulfilled by conformity assessment bodies operating
quality assurance.
55 Notifications from Bulgaria are contained in WTO documents G/SPS/N/BGR/3, Rev.1, and Rev.2,
relating to emergency measures on BSE; G/SPS/N/BGR/2, concerning restrictions on animals due totuberculosis; G/SPS/N/BGR/2, /5 and /6, dealing with restrictions on animals and animal products;G/SPS/N/GBR/4, dealing with poultry products and poultry diseases.   The new Seeds Law and changes in foodsafety laws have not yet been notified to the WTO.Bulgaria WT/TPR/S/121
Page  63
Azerbaijan, Croatia, Macedonia, Slovak Republic, Czech Republic, and the former Federal Republic
of Yugoslavia.56
73. The Law on Plant Protection, amended in November 2001, provides the legal basis for
phytosanitary measures affecting trade in plants. The ministries of agriculture, health, and economy
are the responsible bodies. Amendments to the legislative structure continue to occur in this area. A
new Seeds Law57, adopted at the beginning of 2003,  regulates the maintenance of the variety,
production, processing, distribution, marketing, stor age, and control of seeds and/or propagating
material of agricultural plants and the keeping of th e Official Variety List of the Republic of Bulgaria.
The adoption of the new Seeds Law and the Ordinance for the Amendment and Supplement of
Ordinance 1 on Phytosanitary Control58 are a part of the ongoing harmonization of the national
legislation with that of the European Commission di rectives and international rules. According to the
Bulgarian authorities these measures are in accordance with international conventions and are based
on the recommendations of the EPPO and FAO, and do not discriminate against imported products.Import bans could be applied to plants and plant products with listed quarantine pests, such as insects,
bacteria, and parasites. In the area of food safety control, current priorities are being focused on
equipment and their maintenance. Phytosanitary certificates are required for the importation of certain
animal feeds. Bulgaria has concluded bilateral agreements for cooperation in the field of
phytosanitary control of plants and plant products with 50 countries.
59
(c) Marking, labelling, and packaging
74. In accordance with the harmonization of its legal framework with that of the EU60, Bulgaria
has largely revised its marking, labelling, and packaging requirements. Bulgaria has begun
negotiations for concluding a Protocol to the Europe Agreement on Conformity Assessment and
Acceptance of Industrial Products.  Under the proposed protocol, there would be mutual recognition
between Bulgaria and the EU on each other's designated assessment bodies, thus eliminating the need
for further product testing.  The new protocol is in tended to further facilitate trade between Bulgaria
and the EU. Goods indicated as being covered by  the protocol include low-voltage electrical
machinery, gas appliances, and toys.
75. Traders are required to offer consumer goods that have labels in the Bulgarian language.61
The label must feature information about the manufacturer, the importer, where the product is
                                                     
56 No mutual recognition agreement has been achieved so far.
57 State Gazette  No. 20/2003.
58 State Gazette  No. 28/2003.
59 Albania, Algeria, Argentina, Armenia, Australia, Austria, Azerbaijan, Belarus, Canada, China,
Croatia, Cuba, Cyprus, Czech Republic, Egypt, Georgia,  Hungary, India, Iran, Iraq, Israel, Italy, Jordan,
Kazakhstan, Kyrgistan, Korea, Lebanon, Libya, Macedonia, Mexico, Moldova, Mongolia, Morocco, the
Netherlands, Nigeria, Poland, Peru, Romania, Russia, Singapore, Slovakia, Spain, Syria, Turkey, Ukraine,
United States, Uzbekistan, VietNam, Yugoslavia, and Zambia.
60 The regulations for the application of marking, labelling and packaging include: Law on Technical
Requirements to Products, Law Amending and Supplementing the Law on Technical Requirements to Products,(State Gazette  No. 93/2002); Ordinance on Conformity Marking with the Essential Requirements to Products,
(State Gazette  No. 66/2000); Law on Consumer Protection and Trade Rules, ( State Gazette  No. 30/1999);
Ordinance on Labelling Requirements for Products Different from Foodstuffs, ( State Gazette  No. 60/1999);
Ordinance on Labelling of Crystal Glass Products, ( State Gazette  No. 20/2001); Ordinance on Labelling and
Names of Textile Products, ( State Gazette  No. 2/2002); Ordinance on the Names of the Type of Materials Used
in the Main Parts of the Shoes ( State Gazette  No. 37/2001).
61 Article 5 of the Law on Consumer Protection and the Rules of TradeWT/TPR/S/121 Trade Policy Review
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imported from, the type of product, its physical characteristics, the price, and if necessary instructions
for its use; this information is expected to be comprehensible, accessible, and non-deceptive.62
76. Under the current legal framework, ruminants are subject to compulsory marking by
individual ear tags. Honey beehives must also be  individually marked through poker-work labelling.
(3) Measures directly affecting exports
(i) Registration, documentation, and procedures
77. Bulgaria does not apply any specific export registration requirements; as with imports,
registration with the tax authorities and the economic entitities under BULSTAT is sufficient forcustoms purposes. The documentation requirements for exporting are similar to those for importing;
the export declaration consists of the Single Administrative Document (SAD) and appropriate
accompanying documents.
63  Export declarations must be lodged at the customs office where the
export goods are packed or loaded for export shipment.64
78. Bulgaria has harmonized its export customs procedures with those of the EU, in compliance
with the Europe Agreement.65 Under the Customs Act, Bulgarian goods may leave the customs
territory if all exit formalities have been fulfilled, including automatic and non-automatic licensing.66
Release for export is granted on condition that the goods are in an unaltered state when they leave thecustoms territory of the Republic of Bulgaria. With the exception of goods placed under the outward
processing procedure
67 or the temporary exportation procedure68 all Bulgarian goods intended for
export are subject to these procedures.
(ii) Export taxes, charges, and levies
79. Bulgaria no longer imposes any duties, taxes or other charges on exported goods. At the time
of its WTO accession in 1996, Bulgaria applied a range of export taxes for the purpose of preventing
or relieving critical shortages of foodstuffs and other essential products. However, it undertook
commitments to minimize the use of such measures upon accession. In 1998, export taxes on 24
products, including wheat, barley, and maize were eliminated; export taxes on live cattle, skins, wool,paper waste, metal scrap and metal products were eliminated in 1999; and the remaining export taxes,
on unprocessed wood products, were abolished in January 2000.
(iii) Export prohibitions, licensing, and other restrictions
80. In accordance with United Nations Security Council Resolution 1483, Bulgaria applies export
embargoes on the sale and supply of weapons and related material to Iraq. Prohibitions on exports of
                                                     
62 According to the provisions of Article 6 of the Law on Consumer Protection and the Rules of Trade,
where the type of good does not allow the placement of a label, the trader must provide the consumer with the
information in another appropriate manner or through presentation of the relevant documentation.
63 Article 133 of the Implementing Regulation of the Customs Act.
64 Exceptions from this provision may be included in the Implementing Regulation of the Customs Act.
65 Article 94.
66 Article 163 (1).
67 The outward processing procedure allows Bulgarian goods to be exported temporarily from the
customs territory of the country in order to undergo processing operations, and the products resulting from these
operations are released for importation back into Bulgaria with total or partial relief from import duties.
68 The temporary export procedures allow the use of Bulgarian goods outside the customs territory of
Bulgaria under the condition that the goods are re-imported without having undergone any change exceptnormal depreciation due to the use made of them.Bulgaria WT/TPR/S/121
Page  65
non-military supplies have been lifted.  Article 1 of Council of Ministers Decree No. 9169 applies
prohibitions and restrictions on arms sales or supply of weapons and related material to the following
States: Azerbaijan, Armenia, Bosnia and Herzegovina, Zimbabwe, Iran, China, Liberia, Libya, SierraLeone, Somalia, Democratic Republic of Congo, Sudan, and Rwanda;  and organizations such as the
Taliban and "Al Qaeda". Bulgaria also bans  exports of fire-burnt unsawn timber.
70 This prohibition
was introduced in 2002 to discourage the deliberate burning of forests and the spread of forest fires.
81. Since January 2000, Bulgaria has liberalized its export licensing procedures. Currently, export
licences are required in a limited number of case s such as fulfilment of international treaties and
conventions to which Bulgaria is a signatory; protecting public morals; maintaining public order and
national security; and safeguarding national artistic, historical, and architectural masterpieces.
Licences are issued by the competent government ministries depending on the product and are valid
for up to three months from the date of issue. Auto matic licensing (registration) is applied to precious
metals and unsawn timber exports71 (except for fire-burnt timber). Table III.11 provides the list of
products subject to non-automatic licensing.
Table III.11
Exports subject to non-automatic licensing
Product Relevant legislation
Nuclear material, radioactive substances and other sources of
radiationPeaceful Use of Atomic Energy Act
Gunpowder, explosives  and pyrotechnic material and products
made from them for civil uses, Trinitrotoluene (TNT)Control of Foreign Trade Activities with Arms and Products and
Technologies with Possible Dual Use Act
Smooth-barrel weapons, weapons  using only ammunition withperipheral inflammation and pneumatic weapons for hunting and
sports purposes; fully automated-fire gas- and signal-guns and
revolvers and ammunition for theseControl of Foreign Trade Activities with Arms and Products and
Technologies with Possible Dual Use Act
Artifacts and objects with historical, archeological, numismatic,ethnographic, artistic and antiquarian value, as well as museum-grade natural specimensCultural Monuments and Museums Act
Wild plants and parts thereof, as well as tetter and moss Environment Protection Act, Nature Protection Act, Medical
Herbs Protection Act, and Forest Act
Wild mushrooms Forest Act
Wild animals and parts thereof (other than those which aresubjected to the regulations of the Hunting and Game ProtectionAct), clams, sea and land snails, frogs, including those raised onfarmsEnvironment Protection Act
Live game and genetic material thereof, as well as hunting
trophies, dropped game horns, and game productsHunting and Game Protection Act;
Military products or special-purpose products, and products and
technologies with possible dual use (civil and military use)Control of Foreign Trade Activities with Arms and Products and
Technologies with Possible Dual Use Act; Rules for
Implementation of the Control of Foreign Trade Activities withArms and Products and Technologies with Possible Dual Use Act;List of Arms and Products with Possible Dual Use
Narcotic and psychotropic substances Control of Narcotic Substances and Precursors Act; Ordinance for
the Terms and Conditions of Licensing the Activities with
Narcotic Media for Medical and Veterinarian Purposes fromAnnexes 2 and 3 to Art.3(2) of the Control of Narcotic Substancesand Precursors Act; and relevant regulations
Controlled chemical substances used in the production of narcoticand psychotropic substancesControl of Narcotic Substances and Precursors Act; Ordinance for
Precursor Control
Source : Bulgarian authorities.
                                                     
69 Amended by Decree of Council of Ministers No. 145/2002;  this decree takes into account all
resolutions and decisions imposed by the Security Council of the United Nations, the European Union, and the
Organization of Security and Cooperation in Europe.
70 Article 3a and also in Annex 2a of Decree No. 233/2000.
71 Coniferous and deciduous timber from HS 4403 with diameter at the thin end of more than 4 cm, all
wood species, as well as firewood – HS 4401.10.00.0).WT/TPR/S/121 Trade Policy Review
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82. Before its accession to the WTO, Bulgaria im posed quantitative restrictions on certain exports
in order to ensure adequate supplies in the domestic ma rket and prevent or relieve critical shortages. For
instance, autonomous quotas were applied to the exports of goats, wheat, and barley. U pon accession
in 1996, Bulgaria abandoned all quantitative restrictions on exports of agricultural products.
83. Quantitative export controls remain only on exports of textile and apparel products under
quotas in the United States and Canada, and are administered by the Ministry of Economy. In 2003,
export restraints on Bulgarian clothing, under the Agreement on Textiles and Clothing, covered six
categories in Canada (coats and jackets; winter outerwear; men’s suits, jackets and blazers; ladies’jackets/blazers, dresses and skirts; sweaters; and combed wool fabric), and six in the United States
(woven wool or man-made-fibre fabric containing  more than 15% wool, with a sub-limit for fabric
containing over 36% wool; men’s and boys’ suit-type  coats; women’s and girls’ coats; women’s and
girls’ suits with over 23% wool, women’s woollen sk irts;  and women’s and girls’ trousers, breeches,
and shorts).
(iv) Export subsidies, and duty and tax concessions
84. Bulgaria does not apply any export subsidies. Exports are exempt from excise duties and
VAT.
(v) Export promotion and assistance
85. Bulgarian exporters benefit from the promotional activities of the Bulgarian Trade Promotion
Agency (BTPA). BTPA was established in 2001 as an executive agency of the Ministry of Economy.
BTPA assists Bulgarian companies to increase their international competitiveness by: providing
information on international markets, national a nd international standards, and foreign trade and
investment regimes; enabling Bulgarian participation in international fairs and exhibitions; and
conducting training courses and seminars for exporte rs. BTPA maintains relations with more than 30
trade promotion organizations abroad as well as with international institutions such as the
International Trade Centre UNCTAD/WTO.
72
86. Since 2001, the BTPA has benefited from a number of bilateral assistance programmes,
including an EU PHARE programme to develop the agency’s administrative capacity; Canadian
assistance for export marketing and training for SMEs; Japanese assistance for trade opportunities
development and trade promotion, including participation in Japanese fairs; and assistance from
Greece relating to e-commerce technology development. An Electronic Business Centre wasestablished in the BTPA in 2003.
87. The Export Insurance Law, adopted in 1998
73, provides the legal basis for insurance and
reinsurance on behalf of the State for the export of Bulgarian goods and services against non-
commercial risk. Under this Law, the Bulgarian Export Insurance Agency (BAEZ) is the recognized
statutory authority. BAEZ was established in 1998 as a joint-stock company; the Republic ofBulgaria, represented by the Ministry of Economy, is the main shareholder, with a capital share of
more than 99%. BAEZ covers short-term commercial risks and non-commercial risks related to
Bulgarian exports and investments abroad (commercial risks are covered under normal insurance
legislation). Commercial risks include bankruptcy of the foreign debtor, and delays of due payment
under an export contract by the foreign debtor for a period longer than six months. Non-commercialrisks include: political events, such as wars, coups d'Etat, civil unrest, riots, strikes, embargoes,
                                                     
72 BTPA is one of the founders of the Balkan Regional Centre for Trade Promotion and is a candidate
for membership of the European Trade Promotion Organization.
73  Published in State Gazette  No. 61/1998; amended in No. 112/2001.Bulgaria WT/TPR/S/121
Page  67
natural disasters or other events with comparable effect; announcement of general moratoria on
payments; changes in currency payments regimes; adoption or amendment of legislation or decisions
of the Government or another State body; confiscation or nationalization;  limitations or bans on theexport of goods and services, imposed in accordance with international contracts to which the
Republic of Bulgaria is a party. In this respect products offered by BAEZ include export credit
insurance and insurance of a bank credit line for preshipment financing. Of total insured exports in
2002, 59% were to the EU, 32% to CEFTA countries, 4% to the Balkan countries, and 5% to CIS and
other countries.  A very low share of Bulgaria's exports is insured: although BAEZ is the largestexport insurer, with 99% of the market share, its activities cover less than 1% of Bulgaria's
merchandise exports.
(vi) Free zones
88. "Free trade zones" were originally established in Bulgaria in 1987.  The Customs Act of 1998
redefined them as "free zones".
74 Currently six such zones exist.  Free zones are formally part of
Bulgaria's customs territory but separated from it by fixed checkpoints. Import duty and VAT are not
paid on imported goods entering free zones unless they are released for sale in Bulgaria, while
Bulgarian goods may be stored in free zones without payment of VAT. Goods leaving a free zone
may be exported or re-exported from Bulgaria or be brought into another part of the customs territory
of Bulgaria. The perimeter and the entry and exit points of free zones are subject to supervision andcontrol by the customs authorities. Handling, storage, and warehousing are the most common
activities, but goods may be admitted to the free zones for inward processing or processing under
customs control, as temporary imports, or under the normal import regime.
(4) M
EASURES AFFECTING PRODUCTION AND TRADE
(i) Bankruptcy and competition policy
89. Bulgaria’s bankruptcy regime has undergone fundamental changes since 1991:  Bulgaria
recognized the importance of appropriate bankruptcy policies, which  facilitate the transition process
in that they can support the efficient re-allocation of capital and other inputs to the sectors of greatest
returns. The first post-communist bankruptcy legislation was adopted in 1994 as a new part of the
Commercial Law.75  It set out conditions under which bankruptcy procedures were to be initiated,
defined the contents of the bankruptcy estate, constituted the rights of creditors, set out possibilities for
just satisfaction of creditors, and provided a possibi lity for a "composition" procedure in order to avoid
bankruptcy proceedings. The law regulates the general bankruptcy procedure applicable to all natural
and legal persons with the exception of banks, in surance companies, and pension funds, for which
special provisions are established in the respective laws (Law on Bank Insolvency, Law on Insurance,
Additional Voluntary Pension Insurance Act). State-owned companies are not accorded any
privileges, nor is the State permitted to interfere in bankruptcy proceedings. Thus the law sought toencourage an economic environment that supported the flow of assets from unprofitable state sectors
to private hands for investment in more profitable sectors.
90. In the initial period following the adoption of the new law, bankruptcy and liquidation
procedures remained slow. By November 1998, only 384 companies (less than 0.1% of the corporate
sector) had initiated insolvency or liquidation proced ures. This state of affairs as well as the need for
                                                     
74 The main legislation is Decree No. 2242 of 1987 ( State Gazette  No. 55/1987, amended in
No. 153/1998); the Customs Act, 1998, Article 166-179 and its implementing regulation, Article 620-653; theVAT Act, the Excise Act, and their implementing regulations.
75 State Gazette , No. 63/1994, amended in No. 83/1996; State Gazette  Nos. 100/1997, 70/1998, and
84/2000.WT/TPR/S/121 Trade Policy Review
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Bulgaria to harmonize its bankruptcy legislation with that of the EU prompted further amendments to
the Commercial Law in 1998, 1999, and 2000. These am endments sought to speed up the bankruptcy
proceedings, enhance transparency in the process, and strengthen creditors’ rights.  To this end,additional provisions to the law included: shortening of the claim filing period to 30 days; opening the
possibility of appeal against court decisions; providing the ability to incorporate claims after the
opening of the bankruptcy procedures; and provisions  to safeguard the interests of creditors. As a
result of the changes, insolvency or liquidation procedures have increased steadily: in 2001, 408
insolvency cases were pending from previous years, 457 new cases were initiated and  decisions weretaken on 433 cases, so that 432 cases were pending by the end of the year; in the first half of 2002,
285 of 667 civil insolvency cases were resolved.
91. Reflecting the special role of the banking system, insolvency procedures for banks have, since
1997, been regulated under Chapter 15 of the Law on Banks.
76 The run of bank closures in 1997, and
lengthy bank liquidation procedures, led to the adoption of a new Law on Bank Insolvency inSeptember 2002
77. The amendments to the bankruptcy procedure for banks are aimed at improving
and accelerating bankruptcy and liquidation procedures, improving protection of the public interest,
while safeguarding creditors’ interests, and increasing transparency mainly by strengthening control
of the receivers' activities (see also Chapter IV).
92. The Supreme Judicial Council decided, in 2001, to establish special insolvency panels of
judges to deal with insolvency cases within the district and appellate courts and within the Supreme
Court of Cassation: the aim was to improve the bankruptcy regime by developing the capacity of the
relevant institutions. The implementation of this institutional measure, as well as training programmes
carried out in recent years, is expected to contribute to greater specialization of judges, improvement
of their qualifications, and enhanced court administration capacity. Amendments to the Commercial
Law in 2003 envisage the acceleration of bankruptcy proceedings, the introduction of a special
procedure for sale of debtors' assets, and new conditions for management of insolvent entities bytrustees.
93. Competition policy  is also seen as an essential tool in transforming Bulgaria's economy by
stimulating the survival of efficient firms. The recognition of its importance is grounded in the
provisions of the Bulgarian Constitution. Article 19 of the Constitution stipulates that the Bulgarian
economy is based on free entrepreneurship and guarantees all persons equal juridicial conditions foreconomic activity, preventing the abuse of monopolies and unfair competition.
94. In 1991, Bulgaria adopted its first Law on the Protection of Competition. This law sought to
prevent enterprises from using dominant positions to restrict competition, and prevented Government
from instructing state-owned enterprises in the co nduct of domestic and foreign trade operations. It
also contained provisions on trade secrets and anti-competitive practices.  In 1998, the new Law onthe Protection of Competition was passed, with the ai m of harmonizing Bulgaria's legislation with that
of EU anti-trust rules on restrictive agreements, abuse of dominant position, and merger controls.
78
The new law also strengthens the enforcement powers of the Commission for the Protection ofCompetition
79, inter alia  by giving it the right to impose sanctions and the authority to suggest to the
competent bodies the need to repeal regulative acts issued in violation of the law. The law also detailsprocedural rules on implementation; protection against agreements, decisions, and coordinated
                                                     
76 State Gazette , No. 52/1997.
77 State Gazette , No. 92/ 2002.
78 State Gazette  No. 52/1998.
79 The CPC is approved by the National Assembly, with eleven members approved for up to two five-
year terms. It has the authority to make determinations on violations and impose sanctions, issue permits, andsuggest to bodies of the executive and local government s to repeal regulations in violation of competition.Bulgaria WT/TPR/S/121
Page  69
practices; misuse of monopolistic and dominating positions; unfair competition; and other actions that
may prevent, restrict or breach competition.
95. The legislation declares null and void all types of agreements between enterprises, decisions
by associations of enterprises, as well as concerted practices of two or more enterprises with the
object or effect of preventing, restricting or distorting competition in the market concerned.80 The
Commission may grant exemptions from the prohibition for agreements, decisions or concerted
practices that contribute to increasing or improving the production of goods and the provision of
services or promoting technical and economic development, provided these ensure a fair share of theresulting benefits for the consumers, do not impose on the enterprises concerned restrictions that are
not indispensable to the attainment of the objectives set, and do not give such enterprises the
possibility of eliminating competition in respect of a substantial part of the market concerned. The
Commission may also exempt from the general pr ohibition §9 agreements, decisions and concerted
practices of small and medium-size enterprises, when these assist in enhancing theircompetitiveness.
81
96. Under the regulatory regime, concessions exist for private enterprises to provide particular
economic activities on behalf of the State. All other types of monopoly are examined to ensure that
they do not abuse the operation of the market.82  The following actions of enterprises enjoying
monopoly or dominant position, as well as the actions of two or more enterprises enjoying a jointdominant position, that have as their object or effect the prevention, restriction or distortion of
competition, and/or impairing consumer’s interests, are prohibited: direct or indirect fixing of
purchase or sale prices; limitations on production, trade, and technical development; application of
different conditions to identical types of contract; making the conclusion of contracts subject to
acceptance by the other party of supplementary obligations; and unjustified termination of established
long-term trade relations.
83 Under the law, an enterprise is assumed to have a dominant position if its
share in the market concerned is higher than 35%. Bu t in all cases an enterprise is considered to have
a dominant position if its market share, financial resources, possibilities for access to the market, level
of technology and economic relations with other enterprises may hinder competition in the market
concerned, even if it is independent of its competitors, suppliers or purchasers.84  The Law also
regulates the consequences of concentration of economic activity, in particular merger or acquisition
of two or more independent enterprises, and direct or indirect control over other enterprises or parts ofthem when exercising already such control over one enterprise. All enterprises must notify the
Commission in advance of their intention to pursue concentration, when the total market share of
goods or services involved in the concentration exceeds 20% or the total turnover of the participants
in the concentration for the preceding year exceeds 15 million levs.
85
97. With regard to unfair competition, the regime prohibits the violation of good faith or
established trade custom that potentially harms both competitors and consumers in the internal
market. The Commission has the authority to impose monetary sanctions on violating parties and to
initiate judicial reviews of governmental agencies with respect to regulations, ordinances, and other
administrative rules contradicting a competitive regime.  If a monopolistic position has been
established in violation of the Law on Protection of Competition, the authority responsible for
                                                     
80 Article 9.
81 Article 13.
82 Monopolistic positions may be granted by the law only in cases when they have been provided to the
State pursuant to Article 18, paragraph 4 of the Constitution.
83 Article 18.
84 Article 17.
85 Article 24.WT/TPR/S/121 Trade Policy Review
Page 70
regulation and control (and when there is no such authority, the Council of Ministers) is entitled to set
the prices to be charged by the violating entity for a certain period of time.
98. According to the authorities, the new competition legislation has contributed considerably to
the encouragement of economic efficiency and developing business. The number of decisions made
by the Commission for the Protection of Competition (CPC) increased from 135 in 1998 to 201 in
2002.  About two thirds of these cases dealt with unfair competition and a third related to anti-trust.
The share of  appealed decisions fell from  38% in 1999 to 18% in 2002.  Since early 2002, the
number of ex-officio  investigations by the CPC in the area of prohibited agreements and abuse of
dominant position has also been rising: 14 antitrust cases were initiated by the CPC on its own
initiative in 2002.
(ii) State aid
99. The rules and procedures governing the monitoring and control of state aid are laid down in
the 2002 State Aid Act.86  The Act contains an explicit provision that the assessment of state aids is
"being carried out in compliance with the obligations assumed by the Bulgarian Government under
international treaties".87 The Ministry of Finance monitors and ensures the transparency of state aids
at the national, regional, and municipal level. The Minister prepares and submits the annual state aid
report to the Council of Ministers and the Eur opean Commission. The Commission for the Protection
of Competition (CPC) also receives a copy of the report.
100. Under the State Aid Act, the CPC is the comp etent authority to authorize and control the
granting of state aid. The CPC must be notified prior to any granting of state aid, and such state aid
may be withheld until the Commission pronounces on the matter.88 Decisions of the Commission are
subject to appeal before the Supreme Administrative Court.
101. According to the authorities, state aid is provided for purposes of compensating high
production costs in key economic sectors that have considerable social implications, such as the
energy and transportation sectors, and for other social considerations, such as aid to the poor,producers in mountainous regions, employment  promotion, and environmental protection.
102. In line with the Government's conservative fiscal stance, the amount of state aid offered has
declined both in absolute and relative levels in recent years. As a percentage of GDP, state aid
declined from 3.3 in 1999 to 0.7% in 2001. Similarly, direct subsidies have declined, from 2.5% of
GDP to 0.6% in 2002. The mining and transport sector s have benefited the most from state aid; with
assistance for the production of coal (29.5%) and provision of transport services (29.0%) accounted
for almost 60% of the total in 2001.
(iii) Protection of intellectual property rights
103. Bulgaria is a member of the World International Property Organization (WIPO). It deposited
its instruments of accession to both the WIPO Copyright Treaty and the WIPO Performance andPhonograms Treaty in March 2001. It was one of the original 30 countries that put these two treaties
into force. Bulgaria is a signatory to most inte rnational agreements protecting intellectual property
rights (Table III.12).
                                                     
86 State Gazette  No. 28/2002
87 Article 1 para.2 of the State Aids Act.
88 The CPC has the authority to issue decisions exempting certain types of aid when they meet the
requirements of Art. 8 of the State Aids Act.Bulgaria WT/TPR/S/121
Page  71
Table III.12
International intellectual property agreements to which Bulgaria is party
Title Year of Membership
Paris Convention for the Protection of Industrial Property 1921
Berne Convention for the Protection of Literary and Artistic Works 1921
World Intellectual Property Organization Convention 1970
Madrid Agreement for the Repression of False or Deceptive Indications of Source on Goods 1975
Lisbon Agreement for the Protection of Appellations of Origin and Their International Registration 1975
Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of
Patent Procedure1980
Patent Cooperation Treaty 1984
Madrid Agreement Concerning the International Registration of Marks 1985
Rome Convention (1961) for the Protection of Performers, Producers of Phonograms and Broadcasting
Organizations1995
Convention (1971) for the Protection of the Producers of Phonograms from Unauthorized Duplication of
Their Phonograms1995
Hague Agreement concerning the International Deposit of Industrial Designs 1996
International Convention for the Protection of New Plant Varieties (UPOV) 1998
Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of
Registration of Marks2001
Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks 2001
Locarno Agreement Establishing an International Classification for Industrial Designs 2001
Strasbourg Agreement Concerning the International Patent Classification 2001
WIPO Copyright Treaty 2001
WIPO Performances and Phonograms Treaty 2001
European Patent Convention 2002
Source : Bulgarian authorities
104. Until 1998, Bulgaria was considered to be the largest source of compact disc and CD-ROM
piracy in Europe and one of the world's leading exporters of pirated goods. For this reason, Bulgariawas placed on the U.S. Trade Representative's Special 301 "Priority Watch List" in January 1998. In
November of the same year it was moved to the "Watch list", and was removed from the Special 301
"Watch list" in November 1999. Bulgaria has since undertaken extensive and comprehensive reforms
to improve the regulatory and enforcement regime for intellectual property protection;  as a result its
intellectual property legislation is considered to be amongst the most modern in central and easternEurope.
89
105. During its WTO accession process, Bulgaria committed itself to bringing the elements of its
legislation that were not in full complianc e with the TRIPS Agreement into compliance. 90 According
to the authorities, amendments made 1999 and 2002 have brought Bulgaria’s rules on copyright and
related rights, trade-marks, geographical indications, industrial designs, and layout-designs ofintegrated circuits into full compliance with the provisions of the Agreement (Table III.13). These
amendments have also enabled Bulgaria to harmonize its intellectual property rights legislation with
that of the EU.
                                                     
89 USTR (2002).
90 WTO document WT/ACC/BGR/5.WT/TPR/S/121 Trade Policy Review
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Table III.13
Recent legislation on Bulgaria's intellectual property protection
Legislation
Law on copyright and neighbouring rights  ( State Gazette  No. 56/1993; amendments No. 63/1994, No. l0/1998, No. 28/2000,
No. 77/2002)
Patent law ( State Gazette  No. 27/1993, amendments No. 83/1996; No. 11/1998; No. 81/1999; No. 45/2002 and 66/2002)
Law on Marks and Geographical Indications ( State Gazette  No. 81/1999; amendments No. 82/1999)
Law on Industrial Design ( State Gazette  No. 81/1999)
Law on Topographies of Integrated Circuits ( State Gazette  No. 81/1999)
Law on the Protection of New Plant Varieties and Animal Breeds ( State Gazette  No. 84/1996, amendments No. 27/1998; No. 81/1999;
and No. 86/2000)
Regulation for Industrial Property Representatives ( State Gazette  No. 65/1993; amendments No. 86/1994, No. 41/1997, No. 32/2003)
Regulation No. 31 for Intellectual Property Representatives ( State Gazette  No. 108/1996)
Regulation on the Drafting, Filling and Examination of Application for the Registration of Marks and Geographical Indications ( State
Gazette  No. 9/2000)
Regulation on the Drafting, Filling and Examination of Application for the Registration of Industrial Design ( State Gazette  No. 9/2000)
Regulation on the Border Measures for the Protection of the Intellectual Property Rights ( State Gazette  No. 98/2000)
Source: Bulgarian authorities.
(a) Copyright and neighbouring rights
106. On 1 August 1993, Bulgaria's Law on Copyrigh t and Neighbouring Rights (LCNR) entered
into force, replacing the 1951 copyright law. Bulgaria's copyright legislation provides for theprotection of literary, musical, and graphic works as well as computer programs. Under Article 6 of
the law, the author of a work is deemed to be the person whose name or other identifying mark is
shown in the customary manner on the literary, artistic or scientific work, until otherwise proved.
Rights of reproduction and distribution of sound and video recordings, transactions for the production
of compact discs with recordings and other sound and video recording media containing subjectmatter of copyright and related rights, and the producers of sound and video recording media
containing subject matter of copyright and related rights, are subject to registration with the Ministry
of Culture. The purpose of such registration is to establish control over the rights of reproduction and
distribution of sound and video recordings.
107. The law has been amended several times (1998, 2000 and 2002) with the aim of strengthening
the copyright regime, enabling Bulgaria to comply  with its international obligations including the
TRIPS Agreement, and harmonization with EU legislation. The changes introduced in 1998 included
a ten-fold increase in administrative fines that could be imposed by the Ministry of Culture. The 2000
amendments provided for copyright protection of 70 years, a new communication right, provisional
measures, and border control measures. They also provided administrative sanctions againsttampering with rights management information, and against the manufacture and distribution of
decoding devices without the consent of the copyright holder, and prohibited circumvention devices
and possession of pirated products. The 2002 changes, which entered into effect on 1 January 2003,
included a new chapter on database protection and introduced national exhaustion of distribution
rights, thereby prohibiting parallel imports.  The latest amendments also regulate management andcontrol of the use of software assets acquired by state bodies and their administrations, as well as the
licensing of manufacturers of compact discs and matrices for such discs. Penalties have been
strengthened through the introduction of pecuniary sanctions against companies as well as physical
persons, and the possibility of both civil and criminal proceedings, the latter envisaging the possibility
of prison sentences of up to three years.Bulgaria WT/TPR/S/121
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108. As a result of these improvements to the regulatory regime as well as other measures such as
strict licensing requirements and the setting up of an Inter-Ministerial Council for the Protection of
Copyright and Neighbouring Rights91, the Bulgarian authorities are of the view that the problems of
illegal production and to a large extent the unauthorized use of copyright-protected products have
been resolved.
(b) Industrial property
109. Bulgaria's industrial property rights legislati on (covering patents, industrial designs, marks
and geographical indications, and integrated circuits/layout designs) applies to Bulgarian natural andlegal persons and to foreign and legal persons of States party to international treaties to which
Bulgaria is a signatory. In each case, new legislation or amendments have been introduced in recent
years.
Patents
110. Bulgaria's Patent Law, promulgated in 199 3, has since been supplemented and amended
several times, in order to strengthen the domestic patent regime and fulfil Bulgaria’s international
obligations.
92 The 2002 amendments enabled Bulgaria to harmonize its patent regime with European
patent applications. In July 2002, Bulgaria became a party to the European Patent Convention.
111. The law adopts a broad definition of patents,  including new, non-obvious and industrially
applicable inventions in all fields of technology.  Patent applications are filed with the Patent Officeand recorded in the State Register.
93 Application documents must be submitted in the Bulgarian
language, including three copies of the description, claims, drawings, and abstract. Under certain
circumstances a priority right is offered.94 The Examination Department of the Patent Office has
responsibility for determining the patentability of an invention for which protection is sought.
Successful applications are published in the Official Bulletin  that follows the expiry of the eighteenth
month after the date of filing or the priority date.95
112. Patent protection is provided for a period of 20 years. Patents are granted for methods and
products, including substances obtained by chemical  or non-chemical methods and used in pharmacy
and agriculture. Patents issued for a production process are extended to products directly obtained
from the process.96 Patents are not granted for plant varieties and animal breeds, or for basic
biological methods for their production. The interests of plant and animal breeders are protected by
                                                     
91 The Council is headed by the Deputy Prime Minister and includes the Secretary of Interior, Deputy
Ministers of Foreign Affairs and Economy, the Chief of the Customs Service, and representatives from theChief Prosecutor's Office, the National Investigation Agency, Directorate of the National Police, and NationalSecurity Service.
92 Promulgated in State Gazette  No. 27/1993, in force as from 01.06.1993, supplemented by
No. 83/1996, in force as from 01.11.1996, amended by No. 11/1998, amended by No. 81/1999, in force as from
15.12.1999, amended by No. 45/2002, amended by No. 66/2002, in force as from 09.07.2002.
93 Article 34(1). Information on submitted applications and patents granted for inventions and utility
models is available in the Patent Office online information, at:  http://www.bpo.bg/en/index.html.
94 A priority right in application of international treaties to which the Republic of Bulgaria is party shall
be afforded if, within two months of the filing date of the application with the Patent Office, the applicant
submits a declaration of priority containing the number, date, and country of the initial application, and pays a
fee for the claimed priority.
95 Except under cases of withdrawals, refusals, prior publications, and inventions that contain classified
information representing state secrets.
96 Article 19.WT/TPR/S/121 Trade Policy Review
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the Law on the Protection of New Plant Varieties and Animal Breeds. Patents are not granted for
inventions whose commercial exploitation would be contrary to social order or morality.97
113. Under the Patent Law, any use made of an invention protected by a patent without the consent
of the patent holder constitutes an infringement of the patent.98 However, compulsory licences may be
granted in the event that a patent holder fails to use the invention for a period of four years from filing
of the application for a patent or of three years fro m the grant of a patent; insufficient working of the
invention to satisfy the needs of the national market within four years from filing or three years from
the grant of the patent; and in a period of a declared national state of emergency. 99
Industrial designs
114. Bulgaria's Law on Industrial Design offers protection for registered industrial designs that are
new and have individual character. Applications for registration of industrial designs are filed with the
Patent Office.  A design may not be registered if it is contrary to public policy or to accepted
principles of morality. Registered designs confer on holders the right to use and transfer the designand the right to prevent any third party not having consent from copying the design or commercially
using the design included within the scope of protection. Registered designs are protected for a period
of ten years from the filing date of the application, with the possibility of renewal for three successive
periods of five years.
Marks and geographical indications115. Bulgaria's Law on Marks and Geographical Indications applies to Bulgarian natural persons
and legal entities and to foreign natural persons and legal entities from States party to international
treaties to which the Republic of Bulgaria is party, including all WTO and Paris Convention members.
With regard to other foreigners, the law is applied on the basis of reciprocity, at the discretion of the
Patent Office.
116. The law defines marks as signs that are capable of distinguishing goods or services of one
person from those of another and can be represented graphically. These signs may include names ofpersons, letters, numerals, drawings, figures, the shape of an article or its packaging, a combination of
colours, sound signals or a combination of such elements. Marks are defined to include trade-marks,
service marks, collective marks, and certification mark s. Applications for the registration of marks are
filed with the Patent Office. Marks are registered for a period of ten years following the filing of the
application. Registration of marks may be renewed for an unlimited number of ten-year periods. Theholder of a mark is entitled to use and dispose of it, and to prohibit other parties from unauthorized
use of an identical and similar mark in the course of  business. International registration of trade-marks
with the International Bureau of WIPO, has a similar effect to a registration with the Bulgarian Patent
Office. Under the law, persons who use a mark or sign without the consent of the holder are regarded
as infringers and the holder of the mark is entitled to bring an infringement action.
117. Geographical indications are defined by the law to include appellations of origin or
indications of source.
100 As with all industrial property rights, applications for the registration of
geographical indications are filed with the Patent Office. Successful applicants are entered as users in
the State Register of Geographical Indications and are issued with the relevant certificate.
                                                     
97 Article 7.
98 Article 27.
99 Article 32.
100 Article 51.Bulgaria WT/TPR/S/121
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118. Customs authorities may detain, on their initiative, goods that they have good reason to regard
as infringing registered marks or geographical indications. Infringing goods are required to be seized
and destroyed. Checks to establish trade-mark, geographical indication, and industrial designinfringements are carried out at the request of the holder by the Patent Office.
Integrated circuits/layout designs
119. Bulgaria's Law on Topographies of Integrated Circuits offers protection to original
topographies that are the results of the creators' own intellectual efforts and are not commonplace
among the creators of topographies and manufacturers of integrated circuits at the time of theircreation.
101 Applications for registration of topographies are filed with the Patent Office. Protection of
a topography is provided for a ten-year period. The owner of a topography has the right to exploit the
topography, to dispose of it, and to prohibit third parties from exploiting it in the course of their
commercial activities without the owner's consent.  The rights of the owner do not extend to the
reproduction, in whole or in part, of the registered topography by means of its incorporation in anintegrated circuit or any other way with the exception of those parts of it which are not original where
such reproduction has been done for private purposes or for the purpose of evaluation, analysis,
research or teaching.
102
(c) Enforcement
120. Bulgaria's legislation on intellectual property contains provisions under which infringements
of trade marks, geographical indications, and industrial designs may attract administrative penal, civil,
and/or criminal liabilities. Administrative penal protection is handled by the Patent Office and is
meant to be preventive. Penal injunctions are used by the President of the Patent Office in
accordance with the Law on Administrative Infringements and Penalties103; fines or property
sanctions of 500 to 5,000 levs may be imposed on persons found infringing such rights.
Administrative penalties also provide for the seizure of infringing goods and their subsequent
destruction.104
121. Civil protection consists of the entitlement of the right holder to establish the fact of
infringement, suspension of the act of infringement, and compensation for damages suffered as a
result of the infringement. In the event of an infringement, the owner of the right may request the
processing or destruction of the infringing goods and where the infringement is intentional, of the
infringement tools and the publication of the court decision in two daily publications. Furthermore, atthe request of the right holder, infringing goods carried through Bulgaria's borders may be detained by
the Customs. This also applies to industrial desi gns. Customs officials may also act on their own
initiative or in response to a request from a state authority.  Under the Regulation on Border Measures
for Protection of Intellectual Property Rights, adopted in 2000, 88 requests for intervention had been
submitted by end-2002; three were related to copyright and related rights, four to industrial designsand 81 to trade-marks.  Proceedings on 66 requests were held resulting in about 20 seizures; in 2002,
an estimated 250,000-300,000 pirate CDs were seized by the Bulgarian authorities.
105
                                                     
101 Published in the State Gazette  No. 81, 14 September 1999; entered into force 15 December 1999.
102 Article 17.
103 The affected party can appeal against the penalty at the respective regional court.
104 Industrial designs shall not be destroyed in cases where they can be reworked, so as not to infringe
on the right of the design holder.
105 Bulgarian News Agency, 10 January 2003:  "Authorities Seize 250,000-300,000 Pirate CDs in
2002".WT/TPR/S/121 Trade Policy Review
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122. Criminal penalties are also provided under the Penal Code106 for persons infringing on
copyrights and neighbouring rights, marks, industrial designs or layout-designs of an integrated circuit
without the consent of the right holder. Infringers may be sentenced to a three-year term ofimprisonment or a fine of up to 5,000 levs.
123. Despite these improvements to the regulatory environment and efforts to enforce regulations,
there have still been allegations and complaints from some sources about lack of enforcement against
trade-mark infringements, violations of copyrights, including the production, distribution, and
importation of optical disc media
107, and lack of enforcement of court decisions.108 Though Bulgaria
has not been on the U.S. Trade Representative's Special 301 list since 1999, reflecting the improved
intellectual property regulatory environment, recent trends have led the International Intellectual
Property Alliance to request that Bulgaria again be placed on the Special 301 Watch List.109
(iv) State-owned enterprises and privatization
124. Privatization of Bulgaria's state-owned enterprises is a core element of its transition reforms.
The process began in 1992 with the adoption of the Transformation and Privatization of State-Owned
and Municipal Enterprises Act (Privatization Act). This Act established the institutional framework
(procedures, rules, and administrative bodies) within which transfer of public property was to take
place. The Act has been amended several times, and a number of regulations have been adopted that
widen the scope of investors in the privatization process; improve the process of evaluation of state-owned enterprises, and access to information;  and enable the use of various payment instruments,
including different types of bonds and vouchers.
125. According to the Privatization Act as amended up to 1999, the institutions responsible for the
privatization process are branch ministries, the Privatization Agency and the municipalities. State-
owned enterprises whose long-term gross assets did not exceed 1 million levs in 1999) fall within the
purview of the relevant sectoral ministry;  those with larger assets are the responsibility of the
Privatization Agency (PA), which reports directly to the Council of Ministers and requires itsapproval for the privatization of some large state-owned enterprises. The municipalities are
responsible for the privatization of the municipally owned enterprises in their respective localities.
126. Privatization in Bulgaria proceeded through the implementation of three main programmes:
restitution of land and urban property
110, cash privatization, and mass privatization. Privatization of
urban property proceeded relatively quickly in the early years of transition (1992-95) and providedconditions for the emergence of a large number of small and medium-sized businesses in trade and
services sectors.
111
127. Several schemes have been employed in the privatization process. These include auctions,
competitive tenders, direct negotiations, public offering of shares on the Stock Exchange, centralized
voucher auctions, and preferential sales to employees and management. The mass voucher-basedprivatization auction scheme was administered by the Centre for Mass Privatization. Enterprises
                                                     
106 Amended State Gazette  No. 81/1999.
107 IIPA (2002).
108 USTR (2001).
109 IIPA (2002) and (2003).
110 A comprehensive law on on the restitution of urban property was adopted in late 1991, and the Law
on Compensation of Owners of Expropriated Property was passed in 1997; this provided for compensation ofthe original owners to whom it was not possible to restore real or personal property.
111 See Chapter IV, Box IV.1 for a discussion of the agricultural land restitution programme.Bulgaria WT/TPR/S/121
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offered for privatization in this scheme were selected by the Privatization Agency and the responsible
ministry.112
128. The privatization process took off to a slow start and was stalled for a greater part of the
1990s. This was mainly due to the lack of political will at the time, limited interest by foreign
investors and low incentives for managers and other insiders to privatize.
129. Along with other stabilization and structural reforms undertaken in response to the 1996-97
crisis, Bulgaria accelerated the pace of its privatization programme via sales, mainly to strategic
investors and, in their absence, to management and employee buy-outs and through mass privatizationvoucher auctions. Over the period January 1993 to April 2003, government shares in 4,890 enterprises
were sold, of which 2,670 were whole enterprise s and 2,220 were self-contained facilities. Overall
sales amounted to the privatization of 53.6% of the fixed assets of state-owned enterprises and 81.1%
of the assets subject to privatization. The total value of privatization proceeds obtained over this
period was about $7,603 million, of which $3,072 million were from payments contracted in relationto privatization, $1,080 million from dues committed or paid by the buyers, and $3,499 in investment
commitments. Though sales to foreign investors accounted for less than 4% of the total number of
privatized enterprises (161 enterprises were sold to foreign investors), they accounted for about 46%
of the total privatization proceeds: this was made up of $1,044 million in contracted payments and
$1,950 million in investment commitments.
130. By the end of 2002, divestiture of the large state-owned enterprises in the major economic
sectors, i.e. chemicals, metallurgy, machine building, military and defence, food processing, and
tourism, was virtually complete. However, significant government ownership remain in infrastructural
sectors such as energy, telecommunications, and railway transport. New legislation, the Privatization
and Post-Privatization Control Act, passed in March 2002, seeks to speed up the privatization process,
and to remove flaws that existed in the procedur es, by streamlining procedures on ownership and
sales. The new Act provides for equal treatment of all buyers, without any preference for managementand employee buy-outs, abolishes the right of employees to buy shares on preferential terms, and
prohibits subsequent amendments of contracts with buyers. State-owned shares in companies are to be
offered by public auctions and public tenders, at centralized public auctions (against non-cash
payment tools)
113, and on the Stock Exchange. The Act sets a deadline for finalizing mass
privatization (end-June 2004) and separates privatization procedures from post-privatization control,assigning them to different agencies.
114 Plans for privatization in the year 2003 envisage the sale of
                                                     
112 The mass voucher-based privatization scheme was launched in 1996. For a small fee, each citizen
could receive vouchers (investment bonds) with a nominal value of 25,000 levs. Citizens could invest their
vouchers either directly or through private investment funds. Shares in 1,050 state enterprises, mainly profitableor solvent medium-sized companies operating in different industrial sectors were made available in the firstround of mass privatization. Approximately 3.2 million individuals collected vouchers in the first round of theMass Privatization Programme, thus shares comprising 14. 58% of state-owned assets (equal to approximately
85 billion levs) were transferred to private owners. Citizens, who received vouchers in the second round, could
participate directly or through investment intermediari es in the centralized public auctions and invest in
voluntary pension funds. These investment bonds could be used also by domestic and foreign investors(corporate and natural persons) as a means of payment in any privatization transaction.  In the second round, the
shares offered represented mainly minority or residual in terests in enterprises. The centralized auctions provided
conditions for relatively rapid sale of small interests in enterprises.
113 The Council of Ministers approved a list of companies with a state-owned interest in their capital
that may be privatized using non-cash instruments for 2002 (Decision of Council of Ministers No 485 of
15 July 2002).
114 The Privatization Agency has assumed full responsibility for the privatization of state-owned
interest in the share capital of companies or detached parts thereof with more than 50% of state interest. A newindependent agency is responsible for post-privatization control.WT/TPR/S/121 Trade Policy Review
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some 145 majority state-owned enterprises, and 60 self-contained facilities, as well as some 900
enterprises in which the State has minority shares (Table III.14). However, some 100 state-owned
enterprises, mostly in charge of public utilities,  remain outside the scope of privatization to be
undertaken in 2003.
131. In general, the privatization process has made a significant contribution to the strengthening
of the private sector in Bulgaria. In 2002, the private sector produced 64.2% of GDP and 72.7% of
gross value added. Its contribution to employment in the same year was 74.9%. Increased efficiency
in the productive capacity of the Bulgarian economy, resulting from the privatization process, has alsocontributed to the growth of the economy and the competitiveness of Bulgaria's exports. For instance,
the textiles and apparel sector, which is now almost fully private (state ownership of assets in the
sector is estimated to be 1%), and has benefited from large amounts of foreign investment, has
continued to witness rapid export growth. Tourism, also now largely in private hands, is gaining
momentum despite strong competition from other countries in the region.
Table III.14
Status of principal privatization transactions, May 2003
Name Expected  finalization Development status
"Balkankar holding" EAD, Sofia First half of 2003 Running tender
Seven electricity distributing companies Second half of 2003 Consultants appointed, sales documentation being drafted
"VMZ" EAD, Sopot Second half of 2003 Sales documentation being drafted
Commercial fleet Second half of 2003 Consultants appointed, sales documentation drafted
Bulgarian river fleet Second half of 2003 Consultants appointed, sales documentation drafted
35 hydroelectric power plants (HPP), detached
from "Natsionalna Elektricheska Kompania"
EAD (NEK)Second half of 2003 11 hydro power plants (HPP) sold;
8 auctions imminent;concession permissions expected for 2;
ground ownership and restitution claims under
examination for remaining plants
Three mining companies, detached from NEK One successful tender in May 2003;
concession expected for one company;
one company has been offered against non-cash payment
Bulgaria air Second half of 2003 Consultant appointed, sale documentation drafted
Bulgarian Telecommunication Company(BTC)Final stage of the sale Negotiations taking place with the second-ranked buyer
Bulgartabak Second half of 2003 New procedure after company's restructuring
Source : Information provided by Bulgarian authorities.
State trading enterprises
132. According to Bulgaria's most recent notifications to the WTO on state-trading enterprises,
state-owned enterprises receive no exclusive or special rights or privileges that influence the level or
direction of their imports and exports. At the time of Bulgaria’s accession, 60% of imports and
exports were generated by state-owned enterprises; however, since the acceleration of theprivatization process and the further liberalization of the economy, 91.8% of imports and 92.2% of
exports are currently in private hands.
Price and marketing arrangements.
133. In line with the objective of moving to a ma rket economy, most of the price controls that
existed during the centrally planned era have been  dismantled. The price liberalization reforms were
part of the earlier reforms in the transition process. The price liberalization process has, however,
reduced the goods and services under price administration in specified areas;  these are electrical
energy, heating energy, natural gas, postal and basic telephone services, tobacco products (for internal
sale), and medicines. The share of administered prices was 13.2% of the consumer basket in 2002.
There are no state marketing arrangements in Bulgaria.