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European Parliament 2019-2024 Committee on Petitions 26.10.2020 DRAFT MISSION REPORT following the Fact Finding Mission to Bulgaria on 24-26 February 2020 Committee on Petitions Members of the mission: Dolors Montserrat (EPP, ES) (Leader of the mission) Loránt Vincze, (EPP, RO) Cristian Terheş, (S&D, RO) / as from 13.05.2020 (ECR)) Tatjana Ždanoka (Greens/EFA, LV) Ex officio members: Petar Vitanov (S&D, BG) Tsvetelina Penkova (S&D, BG) Andrey Slabakov (ECR, BG) CR\1216737EN.docx PE658.877v02-00 EN United in diversity EN Contents 1. Introduction........................................................................................................................4 2. Petitions..............................................................................................................................4 3. Summary account of meetings ............................................................................................4 Monday 24 February 2020 at 15:30 ....................................................................................4 Meeting at the Bulgarian Ministry of Justice:..................................................................4 Monday 24 February 2020 at 16:35 ....................................................................................8 Meeting with the petitioners at the European Parliament Liaison Office (EPLO) in Sofia8 Questions and answers session with the petitioners: ......................................................12 Tuesday 25 February 2020 at 9:00 ....................................................................................13 Meeting at the Bulgarian Ministry of Economy.............................................................13 Tuesday 25 February 2020 at 12:00 ..................................................................................18 Meeting at the Bulgarian National Bank (BNB) ............................................................18 Tuesday 25 February 2020 at 16:00 ..................................................................................20 Meeting at Montana, Bulgaria.......................................................................................20 Wednesday 26.02.2020.....................................................................................................23 Meeting with the Commission for Consumer Protection at 8:30....................................23 Meeting with the Bulgarian National Association of Active Consumers at 10:00 ..........26 Meeting with the Chamber of Private Bailiffs - the Private Bailiffs Association at 11:00 .....................................................................................................................................27 Meeting with the Associations of the Private Banks in Bulgaria at 11:30 ......................28 Meeting with the Bulgarian Judges Association and the Supreme Court Judicial Council of Bulgaria at 12:00 ......................................................................................................29 Meeting at 12:45 with the Bulgarian Ombudsman,........................................................31 4. Conclusions and Recommendations ..................................................................................32 On Consumers’ contracts issue .........................................................................................32 Conclusions ..................................................................................................................32 Recommendations.........................................................................................................32 In relation to the visit in Montana: ....................................................................................33 Conclusions: .................................................................................................................34 Recommendation: .........................................................................................................34 ANNEX I .............................................................................................................................35 ANNEX II............................................................................................................................44 ANNEX III...........................................................................................................................51 ANNEX IV .........................................................................................................................61 PE658.877v02-00 2/78 CR\1216737EN.docx EN ANNEX V............................................................................................................................62 ANNEX VI ..........................................................................................................................63 ANNEX VII .........................................................................................................................76 CR\1216737EN.docx 3/78 PE658.877v02-00 EN 1. Introduction The fact-finding mission to Sofia, Bulgaria, from 24 to 26 February 2020, was organised by the Committee on Petitions pursuant to Article 228 of the Rules of Procedure of the European Parliament and it was authorised by the Bureau of Parliament on 16 November 2019. The purpose of the fact-finding visit was to meet with the petitioners, ministers and government officials, civil society representatives, consumer organisations and the Bulgarian Ombudsman regarding numerous petitions received on alleged unfair contract terms in mortgage loans. MEPs also travelled to Montana to investigate the compliance of landfill sites with the environmental and waste legislation of the European Union and to meet with the petitioner and with regional authorities. 2. Petitions Summary in Annex I 3. Summary account of meetings Monday 24 February 2020 at 15:30 Meeting at the Bulgarian Ministry of Justice: The representatives of the Ministry present: Minister of Justice, Mr. Danail Kirilov, Deputy Minister Ms. Desislava Ahladova, responsible for the supervision of public and private bailiffs, Mr. Grigor Todorov, Mr. Georgi Dankov, Ms. Bilyana Bilyakova, Ms. Mitka Zaharlieva, Mr. Vasiliy Druzhinin, Ms. Daniela Belchina, Ms. Irina Kuzmanova, Ms. Abrashova. Minister Danail Kirilov took the floor and thanked the MEPs for the first mission of the European Parliament to Bulgaria while during his mandate as the Minister of Justice. He explained that he was the Chair of the Legal Committee of the National Assembly of the Republic of Bulgaria (the National Assembly) before taking up his present function. The Minister worked on the reform of the Code of Civil Procedure (CPC). The first amendments to the CPC were introduced in 2017, and subsequently in 2019. Background information on the reform of the Code of Civil Procedure When amending the CCP, the National Assembly sought to balance the rights and obligations of debtors and creditors. Important amendments in the execution procedure and order procedure (the last one adopted in 2017) were introduced.. The Minister pointed out that the reform managed to strike a good balance between the interests of the investors and the economy, on one hand, and debtors, on the other hand. He reminded that back in 2005 it was very difficult for banks and other financial institutions to collect debts. The Head of the Delegation, Ms. Dolors Montserrat, presented the members of the delegation and asked about the amendments to the CCP introduced in 2019: What are the consequences for both the debtors and the creditors? If the consumer’rights will be better protected now? PE658.877v02-00 4/78 CR\1216737EN.docx EN If the debtors that entered into contractual obligations before the reform will have the right to appeal? If there is a control over private companies providing loans? Answers to the questions: Minister Kirilov answered that the Bulgarian authorities received a letter about breaches of consumer rights from the European Commission in January 2019.The infringement procedure was then launched (EU Pilot) but the substance of the breach, i.e. unfair terms in the consumers ’ contracts and control over the terms, fall outside of the scope of the Ministry of Justice. The authorities responded to all claims by amending the Code of Civil Procedure . The Ministry of Economy is more competent about these matters. Currently, the courts must monitor the existence of unfair clauses and therefore, the workload of the judges has increased substantially. Payment order enforcement proceedings became more difficult, more similar to the claims proceedings. The lender needs to provide all details regarding the debt. If the judges suspect that there is bad faith, they immediately move to the claims proceedings. After the reform, it will be possible to challenge actions of the bailiffs and the lenders will have more difficulties to recover the debts. If the subpoena is issued, it triggers the claims procedure. In the normal procedure, the lender has to pay high fees. Ms. Desislava Ahladova added that after the reforms there is more transparency and more communication. The appeal is symmetrical to the order proceedings. Courts are required to check all annexes and amendments to the general terms of the contracts. In the past, contracts were not attached to the documents for proceedings, nor were the annexes. There was a high probability ofunfair clauses. Now the court will be able to stop the procedure. The period within which the debtor can complain against the procedure will be increased (from