Аction plan with measures to address the ERM II postcommitments

 Action plan with measures to address the ERM II postcommitments of Republic of Bulgaria and other relevant policies.  

Measures

Activities

Results

Deadline

Status (planned, ongoing, completed)

1.        NON-BANKING FINANCIAL SECTOR

Responsible institution: Financial Supervision Commission

Implementation and reporting of the Financial Supervision Commission’s supervisory plan from August 2019, agreed with EIOPA

Carrying out compliance checks of the technical provisions with the obligations under the Green Card. The actions include carrying out checks, including cross-checks, where necessary to establish the adequacy of the technical provisions in relation to the obligations towards participants in the Green Card participants.

Address the sufficiency of the level of technical provisions

September 2020

Completed

Carrying out inspections: off-site and on-site, including related to risk-based supervision

Address the sufficiency of the level of technical provisions

Regularly
(at latest by December 2022)

Ongoing

Carrying out targeted meetings with audit companies

Ensure compliance with the applicable requirements for assets and liabilities valuation

Regularly
(at latest by December 2022)

Ongoing

Development of secondary legislation on the implementation of the Insurance Code in relation to the management system, including the application of the prudent person principle

Effectiveness of the system of governance

December 2021

Planned

Carrying out an analysis of the investment policies and portfolios of non-life insurers and taking action against insurers where necessary

Application of the prudent person principle

May 2020

Completed

Monitoring the financial stability of the National Bureau of Bulgarian Motor Insurers by receiving periodic reports on its financial status

Ensure proper claims’ handling and settlement process by undertakings, as required by the European Law in order to resolve the problems the Green Card system

Regularly
(at latest by December 2022)

Ongoing

Strengthen the capacity of insurance and social insurance supervision with provision of trainings

Implementation of project under the Structural Reform Support Programme (SRSP) – EIOPA Pilot Insurance Training Programme

Implemented training programme under the Pilot project

December 2020

Ongoing

Implementation of a new project under SRSP.

Implemented training programme under the General Request

December 2021

Planned

Ensure the efficient governance of the supervisory authority, including by timely filling open positions in their governing boards

Completion of the legal procedure for appointing new members of the FSC by the National Assembly

Elected members of the FSC: Deputy Chairman, Head of the Insurance Supervision Department and one member of the Commission, supporting its policy on analysis and assessment of risks on the financial markets, improvement of the supervisory practice and protection of the interests of investors, insured and socially insured persons

July 2020

Completed

2.        STATE-OWNED ENTERPRISES (SOE)

Responsible institution: Agency for Public Enterprises and Control

Ensure the timely and effective implementation the Law on Public Enterprises and to strengthen the capacity of the Agency for Public Enterprise and Control by implementation of project under the SRSP with the assistance of OECD

Develop a state ownership policy

Developed and adopted policy document establishing the state’s ownership policy for the next four years

December 2020

Ongoing

Within 12 months of the entry into force of Law to bring the composition of the boards of public enterprises in compliance with the selection procedures set out in the Law on Public Enterprises

-        Ensured compliance between the boards composition and the selection procedures set in the law;

-        Introduced monitoring mechanism for board nominations

October 2020

Ongoing

Undertake an analysis of the activities of state enterprises established by special laws and submit it to the Council of Ministers

-         Prepared analysis by the Agency, within 12 months of the entry into force of Law, the agency has to prepare an analysis of the state enterprises to clarify the nature of the activities carried out by them – predominantly commercial or public functions and policies, submitted to the Council of Ministers;

-         Developed and adopted guidelines for the analysis of the activities of state enterprises, with a view to assist their transformation into joint stock companies or agencies

October 2020

Ongoing

Prepare and approve annual aggregate reporting on the performance of the state public enterprises

-         Prepared and approved annual aggregate report on the performance of the state public enterprises

-         Developed methodology for aggregate annual reporting;

October 2020

Ongoing

Drafting Rules of Procedure of the Agency for Public Enterprises and Control

-         Adopted by CoM Rules of Procedure of the Agency for Public Enterprises and Control

-         Enabling the Agency to perform its role while keeping its independence and ensuring appropriate resources, including through optimisation of the existing ones

April 2020

Completed

3.        INSOLVENCY FRAMEWORK

Responsible institution – Ministry of Justice

Increase the efficiency of insolvency and restructuring procedures through implementation of legislative amendments to reform the organisation of the courts handling procedures, to strengthen the regulation of the profession of insolvency practitioners and to allow the use of electronic means throughout procedures.

Draft legislative amendments to the Commercial Act regarding the insolvency framework, including full transposition of Directive (ЕС) 2019/1023 in accordance with the applicable deadlines.

Drafted and approved legislative amendments to the Commercial Act and other relevant primary and secondary legislation in line with the requirements of Directive (ЕС) 2019/1023 providing for:

-         early warning tools;

-         facilitation of the opening of insolvency proceedings;

-         introduction of comprehensive framework for the duties of directors where there is a likelihood of insolvency,

-         shortening procedural deadlines within restructuring and insolvency procedures;

-         introducing a new framework for the rehabilitation procedure introduced;

-         additional safeguards against fraudulent actions within procedures concerning restructuring, insolvency and discharge of debt;

-         strengthened regulation of the profession of insolvency practitioners.

July 2021

Ongoing

Organisational change of the Ministry of Justice to operationalise the new regime for the profession of insolvency practitioners

Draft proposal for amendments of the organisational structure of the MoJ.

Amended and adopted by CoM rules of procedure of the Ministry of Justice

November 2021

Planned

Training programs for insolvency practitioners and judges

Drafting and approval of training methodology and specialised trainings for judges and court staff

Developed training methodology for judges and specialised trainings launched;

April 2021

Ongoing

Adopted methodology for assessment of IPs Training Needs

Developed methodology for assessment of training needs of insolvency practitioners

December 2021

Ongoing

Launch the CPD programme for IPs to complement existing training initiatives

Continuous Professional Development framework for insolvency practitioners launched.

April 2021

Ongoing

Specialised electronic tools within insolvency and restructuring

Initial technical feasibility assessment of IIS and initial functional requirements – 9.2020

Draft detailed terms of reference – 1.2021

Implemented electronic tools and platforms ensuring electronic means of communication

January 2022

Planned

Development and introduction of manuals, codes, templates and guidelines

Draft proposal of a Procedural Manual for IPs in insolvency and stabilisation including reporting templates for IPs

Approved Procedural Manual for IPs in insolvency and stabilisation including reporting templates;

September 2021

Ongoing

Draft proposal of standardised templates for parties in insolvency and stabilisation proceedings

Introduced standardised templates for parties in insolvency and stabilisation proceedings

January 2021

Ongoing

Draft proposal of a Code of Conduct and Professional Standards of IPs in Bulgaria.

Adopted Code of Conduct and Professional Standards of IPs in Bulgaria

April 2022

Planned

Statistical data collection and publicity

Draft functional requirements and technical specification for update of the Commercial Register

Updated Commercial Register

September 2020

Ongoing

Draft proposal for a regulation and Methodology for collection and verification of the quality of statistical data incl. statistical forms templates

Adopted methodology

January 2021

Ongoing

4.        ANTI-MONEY LAUNDERING FRAMEWORK

Responsible institution – State agency “National security”, Bulgarian National Bank,
Financial Supervision Commission, National Revenue Agency and others

Enhance the capacity and capability of the supervisory authorities to mitigate the risks of money laundering and increase application of the anti-money laundering framework by obliged entities

(the European Banking Authority (EBA) guidelines will be applied where relevant)

Employ / transform staff to perform tasks related to AML/CTF supervision;

Increased number and expertise of staff engaged in AML/CFT supervision

December 2021

Ongoing

Review the internal procedures for effective supervision based on a risk assessment of the sectors/entities supervised;

Revised internal procedures for effective supervision based on a risk assessment of the sectors/entities supervised

December 2021

Ongoing

Develop a supervisory strategy (to allocate to each obliged entity resources in accordance with their risk-profile);

Supervisory strategy and procedure for reporting on implementation

December 2021

Ongoing

Develop and enforce a risk mitigation policy for the risks of money laundering to which local institutions are exposed (including guidance on how to deal with politically exposed persons);

Guidance for local institutions on how to deal with politically exposed persons

December 2021

Planned

Revise the supervisory procedures manual to ensure a consistent and effective approach to monitoring (for instance record keeping of the files and documents examined during on-site inspections) and follow-up (for instance remedial actions) to ensure that obliged entities comply with their anti-money laundering obligations;

Revised supervisory procedures manual, including procedures for record keeping of the files and documents examined during on-site inspections and follow-up actions

December 2021

Ongoing

Adequate employee screening procedures of the profession company services (e.g. accountants, tax advisers)

January 2022

Planned

Increase the awareness of the obliged entities regarding their obligations under the AML/CFT legislation;

introduction of Moodle-based online learning platform targeted at the obliged entities and FSC employees

June 2020

Completed

Develop and put in place a dissuasive sanctioning policy.

inclusion of administrative penalty provisions in the AML Act and the CFT Act.

May 2019

Completed

Enhance the capacity and analytical capabilities of the Financial Intelligence Unit to make better use of suspicious transaction reports and increase the use of financial intelligence by competent authorities

Increase the staff of FIU through hiring more and specialised staff engaged in processing of suspicious transaction reports and production of financial intelligence based on these reports;

Increased number of staff

October 2020

Ongoing

Develop or acquire IT tools to process and analyse the suspicious transactions reports that FIU receives.

IT tools for processing and analysing the suspicious transaction reports

July 2022

Ongoing

Draw up an action plan to follow up on the risks identified in its national risk assessment

Implementation of a project funded by the SRSP aimed at enhancing the capacity of the competent Bulgarian institutions to effectively mitigate the risks of money laundering and terrorist financing;

Adopted Action plan

July 2022

Ongoing

Complement the national risk assessment with an analysis of risks linked to virtual assets and general risks emanating from the citizenship schemes

Implementation of a project funded by the SRSP aimed at enhancing the capacity of the Bulgarian institutions to effectively mitigate the risks of money laundering and terrorist financing;

Revised / updated national risk assessment, including an analysis of risks linked to virtual assets and general risks emanating from the citizenship schemes

July 2022

Ongoing

REMOVING THE IDENTIFIED IN THE ECB AND EC 2020 CONVERGENCE REPORTS LEGAL INCOMPATIBILITIES

Responsible institutions: Bulgarian National Bank

Amendments in the relevant Bulgarian legislative acts to remove the legal incompatibilities identified in the ECB and the European Commission 2020 Convergence reports

-         Amendments in the Law on the Bulgarian National Bank to strengthen the central bank independence as follows: deletion of art. 3; in art. 14 – to explicitly provide for the right of the competent Bulgarian court to review a decision to dismiss a member of the BNB Governing Council, other than the Governor; in art. 13 – to make a reference in the content of the oath to central bank independence.

-         Amendments in art. 80 of the Law on Counter-Corruption and Unlawfully Acquired Assets Forfeiture to further ensure central bank independence as follows – to provide that in case of ascertainment of a conflict of interest, a member of the BNB’s Governing Council shall be dismissed in accordance with art.14 (1) of the Law on the BNB. 

-         Amendments in art. 56 and art. 56a of the Law on the Credit Institutions as follows – to envisage that the BNB shall not be liable for the information provided by the obliged entities to the Central Credit Register and the Register on Bank Accounts and Safe Deposit Boxes. The amendments aim to insure compliance with monetary financing prohibition.

Submitted by the BNB to the Minister of Finance proposals for amendments in the Law on the Bulgarian National Bank, the Law on Counter-Corruption and Unlawfully Acquired Assets Forfeiture and in the Law on Credit Institutions, along with accompanying documents;

October 2020

Ongoing

Amendments in the Law on the Bulgarian National Bank in relation to legal integration of the BNB into the Eurosystem and ensuring further compliance with monetary financing prohibition.

Submitted by the BNB to Minister of Finance proposals for amendments in the Law on the Bulgarian National Bank, along with accompanying documents.

2022 - Prior to the EU Council decision on the adoption of the euro by Bulgaria

Planned

 

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