ACF: Suspicions of serious irregularities in the judicial acts in favor of Eurolab 2011 Ltd regarding “Capitan Andreevo” Border Crossing

In the last two weeks of July, the Sofia-City Administrative Court (SCAC) and the Supreme Administrative Court (SAC) swiftly ruled on a total of six appeals by Eurolab 2011 Ltd.

One of the court’s rulings presents serious violations, according to a legal analysis published today by the experts of the Anti-Corruption Fund (ACF).

Particularly worrying is the decision of the SAC from 19.07.2022, by which the court immediately and unconditionally ordered the Bulgarian Food Safety Agency (BFSA) to stop blocking the access of Eurolab 2011 Ltd employees to carry out loading and unloading activities at the border and to perform the function of “operator” within the meaning of Regulation (EU) 2017/625 of the European Parliament.

The court’s decision is perplexing as it reflects an understanding that an “operator” is some specific function that is only performed at a Border Crossing area by a private legal entity loading and unloading goods at the border in return for a government fee. This decision, and the conclusion that the BFSA is not entitled to carry out loading and unloading activities on its own as part of its official control activities, are, in fact, contrary to the letter and spirit of Regulation (EU) 2017/625 as well as national legislation. 

“By law, operators only carry out ancillary activities at the border, and their activities are fully controlled by the official control authorities, such as BFSA,” says Lora Georgieva, Senior Legal Advisor at ACF.

“Through their ruling, the judges of the SAC granted a private legal entity part of the powers of the state authorities of the official border control, both in terms of carrying out the substantive control and in collecting a state fee for this service. This is a scheme we already know from the ‘Golden Puddle’ Case where such powers were granted to P.F.C. EOOD company.[1]”

The court’s reasoning was that Eurolab 2011 Ltd had contracts with importers to unload their goods. However, according to the ACF’s experts, no obligations could be assigned and assumed by virtue of an agreement that would override the special permit regime at the border. 

“The Border Crossing Ordinance categorically prohibits any activities carried out by third parties that impede border control,” Lora Georgieva continued. “The permissible activities that third parties can carry out at the border are listed exhaustively: banking, insurance, and VAT refund activities. Any other activities in the border-crossing areas can only be carried out after explicit permission following the procedure laid down in the law. In the present case, there is no such permission, and it is not alleged that there is permission from a controlling authority. Moreover, loading and unloading activities carried out by an unauthorized private entity, which is also representative of the importing private companies, would, in any event, reduce or create a significant risk of reducing the effectiveness of the official controls carried out at the border-crossing areas.”

 According to the ACF experts, the very admission of Eurolab 2011 Ltd’s appeal and its examination on the merits by the SAC is also worrying. By law, the SAC can only order the termination of the actions of an administrative body, such as the BFSA, if these actions are carried out without legal justification. However, the actions of the BFSA are precisely in the exercise of its statutory functions concerning the border phytosanitary controls. 

The ACF experts also found irregularities in the distribution of cases following Eurolab 2011 Ltd’s complaints to the SAC. The documents for the three appeals were filed in court on three different dates – June16th, 2022, June 27^th, 2022, and July 1^st, 2022. This raises suspicions that, in contravention of the rules of the SAC, the files were given three consecutive case numbers simultaneously on July 8^th, 2022, and were allotted to an almost identical panel of judges simultaneously on July 11^th, 2022. 

“The question arises as to what necessitated this delay – in one case, more than 20 days so that the cases in the three files were initiated simultaneously and distributed during the judicial recess among a limited number of judges,” the Anti-Corruption Fund asked. 

The ACF has reported the irregularities in the distribution of cases to the Inspectorate of the Supreme Judicial Council.

“We are following the actions of all institutions in this case. We expect a prompt response from the Inspectorate of the SJC on the violations we have identified, and we will inform the public in due course,” said Boyko Stankushev, Director of the Anti-Corruption Fund. 

The complete analysis of the ACF on the SAC ruling can be read here: https://acf.bg/bg/stanovishte-otnosno-izvarshvaneto-na-to/

The ACF’s report to the Inspectorate of the SJC can be viewed here: https://acf.bg/wp-content/uploads/2022/08/сигнал_ИВСС_Евролаб_0004.pdf

[1] https://acf.bg/en/kazusyt-zlatnata-lokva/