Bulgaria Corruption Report

There is a high risk of corruption when dealing with Bulgaria’s police. Corruption and impunity are widespread within Bulgaria’s police; the government has mechanisms to investigate and prosecute abuses, but the implementation is lacking (HRR 2016). Companies report insufficient confidence in the reliability of police services and they attribute significant costs to crime and theft (GCR 2017-2018). Three-quarters of businesses pay for security in Bulgaria (ES 2013). Almost a third of Bulgarian respondents identify the police as corrupt, while less than two in every ten surveyed report to have paid a bribe to police officers (GCB 2017). Organized crime in Bulgaria is enabled by corruption in the public administration, judiciary, police, and customs (ECCVM 2017).

Bulgaria’s public services are affected by corruption, and foreign companies can expect demands for bribery and facilitation payments. Over two-thirds of companies indicate that bribery is a widespread practice in Bulgaria (EY 2017). Almost a fifth of companies report gifts and informal payments being necessary to “get things done”, especially when obtaining operating licenses and electrical connections (ES 2013). Corruption and inefficient government bureaucracy constitute the two most problematic factors for doing business in Bulgaria (GCR 2017-2018). One-third of citizens perceive public officials and civil servants to be corrupt, while less than one in every ten surveyed report to have paid a bribe to a public official (GCB 2017). Corruption at the lower levels of government remains a problem (ECCVM 2017). Efforts to combat corruption in the civil service have not been systemic, but only targeted at individual cases (BTI 2016). Officials in all branches of government reportedly engage in corrupt practices with impunity (ICS 2017).

Starting a business takes more steps and more than double the time required elsewhere in the region (DB 2018). Obtaining a construction permit takes a few more steps than the regional average, but significantly less time is required (DB 2018).

There is a high risk of corruption when dealing with Bulgaria’s customs administration. Businesses indicate that irregular payments and bribes are common when dealing with imports and exports (GETR 2016). More than two-thirds of respondents believe that abuse and corruption are widespread among customs officials (Eurobarometer, Feb. 2014). Burdensome import procedures, tarrifs, and corruption at the border are cited as the most problematic factors for importing (GETR 2016). The time predictability of import procedures is insufficient and the efficiency of the clearance process is rated as poor (GETR 2016). Notwithstanding, dealing with imports and exports is far less costly and time-consuming than the regional average (DB 2018).

Corrupt customs officials are known to exchange bribes with organized crime groups and smugglers (European Commission, Feb. 2014). Numerous border officials were arrested in 2016 for taking bribes from human traffickers (Sofia Globe, Dec. 2016).

Public procurement is widely recognized as carrying particularly high risks in Bulgaria, with conflicts of interest, kickbacks and bribery being frequently reported (ECCVM 2017; ICS 2017). Diversion of public funds and favoritism in the decisions of government officials are common (GCR 2017-2018). Likewise, bribes and irregular payments in the process of awarding public contracts and licenses are common (GCR 2015-2016); almost a third of companies expect to give gifts to procurement officials in order to secure government contracts (ES 2013). More than half of all companies report of corruption preventing them from winning tenders (European Commission, Feb. 2014). Among the main risks of corruption are the concentration of market power in the hands of the public administration, the lack of effectiveness of procurement procedures, the lack of integrity and control of procurement officials and bodies, political interference in the work of the Public financial Inspection Agency (PFIA), structural governance deficiencies, and too many frequent changes to the legal framework of public procurement (CSD 2015, CSD 2017).

The use of single-bidding contracts, in which contracts may be tailored to a single party, are an important corruption risk in Bulgaria (CSD 2017). In fact, evidence shows a concentration of public procurement among larger companies, and the channeling of certain procurement contracts to specific companies (CSD 2015). The award of large road and energy infrastructure development projects, are reportedly heavily affected by political patronage (CSD 2015). Evidence of corruption in such projects, along with projects involving high-level public officials are rarely investigated or prosecuted (ICS 2017). Companies convicted of violating procurement regulations, are excluded from future tenders (CSD 2015).

Bulgaria’s interim government found in February 2017 that over half of the defense procurement contracts signed in 2016 contained irregularities and nine of the contracts are being investigated for fraud (Reuters, Feb. 2017). Former Defense Minister Nikolay Nenchev has been charged with misuse of office for failing to implement a contract struck with Russia for the repair of Bulgaria’s Soviet-era jets (Reuters, Feb. 2017). Nenchev has also been charged with pressuring a subordinate in a procurement contract that ended up costing the state EUR 127,000 (Reuters, Feb. 2017).