THE REPUBLIC OF BULGARIA EXPORT CONTROL SYSTEM THE

THE REPUBLIC OF BULGARIA EXPORT CONTROL SYSTEM THE DEVELOPMENT OF THE BULGARIAN NATIONAL EXPORT CONTROL SYSTEM THE ROLE OF THE MINISTRY OF ECONOMY AND ENERGY WORKING WITH OTHER MINISTRIES TO CONTROL ARMS AND DUAL-USE EXPORTS October 2005 by Ivelina Bahchevanova and Christo Atanasov

THE LEGISLATION The export control system in the Republic of Bulgaria was established in 1995 -1996 with the enactment of : Law on Control of Foreign Trade Activity in Arms and Dual-Use Goods and Technologies (adopted 1995, amended 2002) The Regulation on Implementation of the Law on Control of Foreign Trade Activity in Arms and Dual-Use Goods and Technologies (adopted 1996, amended 2003) Decree No. 69/31. 03. 2004 for adoption of List of Arms and Dual. Use Goods and Technologies Decree No. 91/09. 04. 2001 for adoption of List of States and Organizations Towards Which the Republic of Bulgaria applies embargoes or restrictions for sale or delivery of arms and related equipment (last amended March 2005) Law on Prohibition of Chemical Weapons and Control of Chemical Toxins and Their Precursors (2000, amended 2005)

NATIONAL LIST OF GOODS AND TECHNOLOGIES SUBJECT TO EXPORT CONTROL The National Control List complies with the terms and the content of all items and technologies covered by: EC control list of dual-use items (WA, MTCR, NSG and the AG) The CWC scheduled chemicals WA Munitions List

THE DEVELOPMENTS OF THE BULGARIAN EXPORT CONTROL The necessity of further strengthening of the control on the foreign trade in arms and dual-use goods and of improving the implementation of Bulgaria’s international obligations and commitments in this field was additionally amplified by the events of 11 th September 2001 and Bulgaria’s adherence to the international anti-terrorist coalition, as well as in response to a serious challenge before the international community that could be defined as “globalisation of the international trade in arms and dual-use goods and technologies”.

THE KEY AMENDMENTS IN 2002: Introduction of licensing regime for brokering of foreign trade in arms and dual-use goods and technologies from and to the territory of the Republic of Bulgaria applying to Bulgarian or foreign individuals or legal entities Introduction and definition of criteria for economic stability and reliability for the purposes of the licensing of physical or legal persons Introduction of the principle of consensus in the decision-making process for granting of arms and dual-use goods transactions’ permits Enhanced sanctions against possible violators

The definition of “brokerage” “The “brokering activity”, related to the foreign trade deals in arms and/or dual use goods and technologies is a part of the foreign trade and includes all activities, related to the preparation and/or execution of the foreign trade deal, including shipping services, transportation services, consultancy, financing, when the person, executing these activities, is not the exporter, importer or re-exporter and in any case when these activities are related to the territory of the Republic of Bulgaria or to the use of telecommunication network and/or post services of the Republic of Bulgaria”

“CATCH-ALL” clause Follows the content of the identical provision in the EU acquis and allows control (issuing permit) of dual-use goods and technologies, not included in the control lists, when these goods/technologies could be used for developing, producing, using, maintaining, storing, detecting, identifying or proliferating chemical, biological or nuclear weapons, or when they could be employed for military end-use

“INTANGIBLE TRANSFERS” “The export includes also the transfer of software and technologies by electronic means, fax or telephone intended for an user outside the borders of the Republic of Bulgaria, and control measures apply also to the verbal transfer of technologies using technical means only in cases when the technological data are contained in a document and the relevant part therein is read aloud or described to the same effect ”

RESTRICTIONS ON TRANSFERS The Bulgarian government adopted and published a List of countries and organizations towards which the Republic of Bulgaria applies prohibitions or restrictions on the sale and supply of arms and related equipment in accordance with United Nations Security Council (UNSC) resolutions and decisions of the EU and the OSCE. The List is being constantly amended, last amendment is in March 2005.

INSTITUTIONAL MECHANISM OF THE BULGARIAN EXPORT CONTROL SYSTEM Control of foreign trade in arms and dual-use goods and technologies is organised in three levels: Licensing (Authorisation) of companies engaged in international trade and transportation of arms and dual-use goods and technologies, including brokers Granting of permits for individual transaction on a case-by-case basis Control of the execution of the transaction

Licensing (Authorisation) of the companies Interministerial Council on the Military Industrial Complex (IMC) with the Council of Ministers Issues the licenses giving the right to conduct foreign trade, to transport and to be a broker in transactions involving arms and dual-use goods and technologies Co-chaired by the Minister of Economy and Energy and the Minister of Defence IMC members: the Deputy Ministers of Economy and Energy, Foreign Affairs, Defense, Finance, Interior, Transport and Telecommunications, Regional development and Public works, the Director of the National Intelligence Service and the Deputy Chief of Staff of the Bulgarian Army.

Permit for individual transaction Issuing authority: The Interdepartmental Commission on Export Control and Non-Proliferation of the Weapons of Mass Destruction with the Minister of Economy and Energy (IDC) Chairman: the Minister of Economy and Energy Members: representatives of the Ministries of Economy and Energy, Foreign Affairs, Defence and Interior

Types of permits Export Permit Import Permit Re-export Permit Transit Permit

Export and Re-export requirements filled-in application’s and permit’s form in 4 copies copy of the license for performance of foreign trade activities in arms or DUIT issued by IMC EUC and/or IIC in original issued by the competent authorities of the country of the end user and a certified translation of the certificates to Bulgarian copy and a certified translation to Bulgarian of the document confirming the foreign trade transaction a copy of the license of the intermediary if there is such re-export permit by the competent authority of the country from which the goods are imported in case of re-export

PRE-LICENCE SCREENING u u Types of goods – proper description/list classification Parties involved in the transaction – authorization for activity performance Character of destination – free, sensitive, embargoes Purposes of the end-use – military/civilian; accuracy of exporter’s declaration/confirming documents

INSTITUTIONS’ CO-OPERATION DURING THE PRE-LICENCE SCREENING PROCESS IMC authorization Mo. EE permits documents’ accuracy MFA foreign-political assessment Mo. I security/intelligence information Mo. D specific military assessment Pre-licensing checks IDC decisions denials

POST-LICENCE SCREENING Transaction fulfillment u Delivery verification u Possible changes in the terms of delivery u Possible changes of the end-use/enduser u

INSTITUTIONS’ CO-OPERATION DURING THE POST-LICENCE SCREENING PROCESS Mo. F customs checks MEE DVC license return MFA diplomatic channels Mo. I intelligence information, convoys Mo. D military assessment/ intelligence information DELIVERY/END-USE VERIFICATION fulfilled transfers data bases sanctions in case of illicit transfer

INSTITUTIONAL SYSTEM OF THE EXPORT CONTROL Ministry of Economy and Energy Ministry of Finance MFA National Intelligence Service IMC with the Council of Ministers Ministry of Defence Ministry of Transport BA General Staff Foreign trade licence Mo. I Embassy of the Republic of Bulgaria Foreign Embassies EUC check MFA EUC check MEE Interdepartmental Commission with the Ministry of Economy and Energy Permit for every single transaction DVC Mo. D MFA Mo. I Dangerous Goods Control Service (Mo. I) Permit Customs Agency DELIVERY ON SPOT INSPECTIONS EXPORT / REEXPORT Physical inspection

RESPONSIBILITIES OF THE MINISTRY OF ECONOMY AND ENERGY n n The Minister of Economy and Energy is a Co-Chairman of the Interdepartmental Council The Minister of Economy and Energy is Chairman of the Interdepartmental Commission Two Deputy Ministers are members of the Interdepartmental Commission The Ministry of Economy and Energy is a major participant in the international export control regimes. Its representatives participate in the meetings and sessions of the regimes and keep track of the information exchange.

RESPONSIBILITIES OF THE MINISTRY OF ECONOMY AND ENERGY INTERNATIONALLY CONTROLLED TRADE & SECURITY DIRECTORATE ARMS EXPORT CONTROL DEPARTMENT DUAL-USE EXPORT CONTROL DEPARTMENT

RESPONSIBILITIES OF THE INTERNATIONALLY CONTROLLED TRADE DIRECTORATE u u organizes the sessions of the Interdepartmental Commission; prepares protocol from the sessions of the Commission; issues permits or denials following the decisions of the Commission; keeps databases about: t flow of documentation – incoming and outgoing; t permits and denials issued; t information received by international organizations and export control regimes – about transfers and denials issued, countries and end-users of concern t information received by partners about countries and end-users of concern

RESPONSIBILITIES OF THE INTERNATIONALLY CONTROLLED TRADE DIRECTORATE u u u performs pre-licence check of documentation; maintains contacts with applicants/industry; prepares notifications for transfers and denials following the obligations of the Republic of Bulgaria under international organizations and export control regimes; maintains the communication with other ministries and institutions involved in export control; participates in seminars with other institutions involved in export control; organizes out-reach programs with industry.

FURTHER DEVELOPMENTS IN THE EXPORT CONTROL SYSTEM IN THE REPUBLIC OF BULGARIA Amendments in legislation in view with EU membership: Ø Separate legislation has to be established for dual-use items and technology. It will be in compliance with Regulation 1334/2000 of the EU and will enter into force by the date of membership. The today’s two-tier licencing systems will be changed with the establishment of a number of licences in terms of the activity performed (import, export, transit, etc. ), and terms of nature of goods and in terms of end-user (EU or non-EU member); Legislation covering arms shall be further improved. One hand some unnecessary control shall be removed (for instance donations from NATO or EU countries for the Bulgarian Mo. D) and on the other hand control shall be strengthened in view of non-circumvention of existing restrictions or diversion of goods.

FURTHER DEVELOPMENTS IN THE EXPORT CONTROL SYSTEM IN THE REPUBLIC OF BULGARIA Ø Ø Ø Brokerage definition shall be further improved to cover the activity of Bulgarian companies or citizens between third countries in line with the EU, OSCE and Wassenaar Arrangement common positions and guidelines. Decree No. 91/2001 for adoption of List of States and Organizations Towards Which the Republic of Bulgaria applies embargoes or restrictions for sale or delivery of arms and related equipment shall be substantially amended by adoption of the EU Code of Conduct on Arms Exports. Administrative capacity has to be further improved following the recommendations of the EU Commission.

FURTHER DEVELOPMENTS IN THE EXPORT CONTROL SYSTEM IN THE REPUBLIC OF BULGARIA Ø Ø Ø Outreach activity with industry has to become more regular in order to encourage companies to implement self-control and establish internal compliance programs. Enforcement and inter-departmental cooperation has to be strengthened further to provide an even better compliance with the legislative requirements. Electronic communication between ministries and institutions has to be fully implemented in view of improvement of information exchange.