ACF: BFSA violated the law by concluding a lease agreement with Eurolab 2011

The contract with which the Bulgarian Food Safety Agency (BFSA) has leased premises at the Kapitan Andreevo border crossing to Eurolab 2011 Ltd was concluded in violation of the law.

 This is the conclusion of a legal statement published today by the Anti-Corruption Fund (ACF) lawyers. According to the opinion, the law unequivocally prohibits the rental of public state property buildings used for official border control. 

 “The buildings have a particular purpose – official food safety border control – which can only be performed by the authorized state body BFSA. Any contract for their lease to another person essentially changes the purpose of the buildings. This is a clear violation of the law,” says Daniela Peneva, legal advisor to the Anti-Corruption Fund. 

 The ACF’s opinion also cites a decision of the Supreme Administrative Court (SAC) in an identical case. According to the decision, it is not permissible to lease public state-owned buildings if this changes their purpose.  

 In March this year, the ACF asked BFSA under the Access to Public Information Act: on what grounds is the Euro Lab located in BFSA premises in the Kapitan Andreevo border-crossing point? 

 After a lack of a reply from the institution and subsequent court proceedings in the Administrative Court – Sofia-City (ACSC), BFSA was ordered to provide the requested information. 

 The following is clear from BFSA’s response to the ACF: 

 On February 1st, 2012, the Executive Director of BFSA, Yordan Voynov, concluded a lease agreement with Stop Group Ltd (now called Interpred Eurologistic Ltd), the owner of the Euro Lab laboratory. Under the contract, BFSA provides for ten years the use of six buildings for quality and food safety control in the area of the border crossing point “Capitan Andreevo”: 

 – Building for “live animals.”

– “Live animals control” building

– Building for the control of produce for human consumption

– Non-human consumption control building

– Phytosanitary control building 1

– Phytosanitary control building 2

 According to the BFSA, after a tender, a new lease agreement for the same buildings was signed on December 31st, 2021. The deal was with a new leaseholder – the newly registered company “Eurolab 2011” Ltd, the new owner of the laboratory “Eurolab,” located in the same buildings at the border crossing point Kapitan Andreevo. Bids for the contract were submitted at 21:00 on December 31st, 2021. The agreement itself was signed at 22:26 on December 31st, 2021, by Deputy Executive Director Nikolay Rosenov, despite the order of Agriculture Minister Ivan Ivanov, which prohibits BFSA from concluding new contracts.

 According to the ACF’s legal opinion, the contracts by which BFSA leased premises at the border to Interpred Eurologistic Ltd in 2012 and Eurolab 2011 Ltd in 2021 were concluded in violation of the procedure for the disposal of state property. 

 The law clearly states that public state-owned properties may be leased, provided they are used per their intended purpose.

 “No legal entity other than BFSA may exercise border control. In other words, any contract for the lease of the buildings to an entity other than BFSA means that they are not used for their intended purpose,” Daniela Peneva added. The fact that the buildings are to be used for other purposes (preparation of animals and goods, ancillary activities) and not for official control is evident from the contracts’ wording. 

 The ACF’s opinion also cites a decision of a five-member panel of the Supreme Administrative Court (SAC) in an identical case[1]. According to the decision, it is inadmissible to lease public state-owned buildings if they are not used for their intended purpose[2].  

 The December 31st, 2021, order, determining the leaseholder after the tender, was annulled by order of the Executive Director of BFSA from July 1st, 2022. The lease agreement of the same date concluded based on the nullity order was terminated by the same order. Eurolab 2011 is currently challenging the order of the Executive Director of BFSA of July 1st, 2022, before the Administrative Court of Sofia City. 

 “Regardless of the case’s outcome, the leasing procedure has a fundamental flaw. It is due to the original impossibility of leasing the buildings in the area of the Border-crossing point for food safety control. It is a reason for revoking the order and terminating the lease,” the ACF opinion said.

 “The conclusion of such a contract, by which the BFSA is practically deprived of the buildings granted to it for carrying out official control, contradicts the legal order and any common sense. It is entirely unclear what requires BFSA to provide its buildings for official control to a private party under highly unfavorable conditions to terminate the contract while retaining the right of access to the facilities. The question also arises regarding how effective official food safety control is carried out on premises controlled by a private company, a representative of the importers, and the laboratory’s owner where the samples are analyzed.

The interests of the Bulgarian citizens and the Bulgarian state require that the state-owned buildings at Kapitan Andreevo be used for their intended purpose of border control by the official control bodies and not by private companies. 

 The Minister of Agriculture and the Executive Director of BFSA should submit to the Governor a reasoned proposal for the confiscation of the properties, as they are not being used for their intended purpose and without legal justification. 

 “We will monitor the decision in the case and inform the public in due course. We will also seek the additional information that the BFSA is obliged by the court to provide us,” said Boyko Stankushev, director of the Anti-Corruption Fund. 

The full legal opinion of the ACF can be read here:

[1] See Decision № 5164 from 11.05.2015 regarding administrative case № 308/2015, 5-member panel of the SAC

[2] Ibid.