Ministry of Finance :: Аction plan with measures to address the ERM II postcommitments

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)	Completed
	Carrying out targeted meetings with audit companies		Ensure compliance with the applicable requirements for assets and liabilities valuation	Regularly (at latest by December 2022)	Completed
	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	Completed
	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	Completed
	Implementation of a new project under SRSP.		Implemented training programme under the General Request	December 2021	Completed
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	March 2021	Completed
	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	April 2021	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	February 2021	Completed
	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;	February 2021	Completed
	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 2022	Completed
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	Completed
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	Completed
	Adopted methodology for assessment of IPs Training Needs		Developed methodology for assessment of training needs of insolvency practitioners	December 2021	Completed
	Launch the CPD programme for IPs to complement existing training initiatives		Continuous Professional Development framework for insolvency practitioners launched.	December 2021	Completed
Specialised electronic tools within insolvency and restructuring	Initial technical feasibility assessment of IIS and initial functional requirements – 6.2021 Draft detailed terms of reference – 7.2021		Implemented electronic tools and platforms ensuring electronic means of communication	January 2022	Completed
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	Completed
	Draft proposal of standardised templates for parties in insolvency and stabilisation proceedings		Introduced standardised templates for parties in insolvency and stabilisation proceedings	July 2021	Completed
	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	Completed
Statistical data collection and publicity	Draft functional requirements and technical specification for update of the Commercial Register		Updated Commercial Register	June 2021	Completed
Statistical data collection and publicity	Draft proposal for a regulation and Methodology for collection and verification of the quality of statistical data incl. statistical forms templates		Adopted methodology	July 2021	Completed
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	Completed
	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	Completed
	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	Completed
	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	Completed
	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	Completed
			Adequate employee screening procedures of the profession company services (e.g. accountants, tax advisers)	January 2022	Completed
	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	Completed
	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	Completed
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	Completed
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	Completed
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	Completed
	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	Completed