In Contravention of European Law, Supreme Administrative Court Yet Again Favors Private Company That Had Taken Over Key Public Functions at Kapitan Andreevo Border Crossing

The Anti-Corruption Fund Foundation (ACF) is sounding the alarm about yet another unlawful decision of the Supreme Administrative Court (SAC) on a case that has direct impact on national security and food safety, not only in Bulgaria but also in the European Union.

On 15 December, just before the Christmas holidays, SAC has yet again decided in favor of Evrolab 2011 EOOD (single-member LLC.), the company at the heart of the scandal at the Kapitan Andreevo border crossing. The company became notorious in 2021 when it emerged that it had de-facto taken over phytosanitary control functions in the remit of the Bulgarian Food Safety Agency (BFSA). Since April 2022, the public body has been trying to reestablish control over the border crossing while Eurolab has been challenging its actions in different courts.

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“Several days ago, following its unlawful decisions from June last year, SAC has again issued a decision that contradicts the law and hampers BFSA’s attempts to defend the public interest after years of inaction,” said Boyko Stankushev, director of ACF.

The recent decision refers to an order issued by the executive director of BFSA in August 2022. According to the order, all checks carried out for the purposes of phytosanitary and veterinary control, checks of products of non-animal origin, the related handling activities, and laboratory analyses are the sole responsibility of BFSA employees. Such activities can only be carried out using equipment that belongs to the agency.

“The order was intended to stop an unlawful practice established for years at the Kapitan Andreevo borer crossing, namely, a private entity, which lacks the necessary competence and authority and at the same time represents the interests of food importers, exercising control over BFSA activities intended to guarantee food quality and safety,” said Lora Georgieva, legal expert at ACF.

How it all started

In February 2012, in contravention of the law, BFSA leased six buildings located at the border crossing to the recently established company Stop Group EOOD (later renamed Interpred Eurologistic EOOD). ACF has reviewed the lease agreements, publishing a detailed analysis in October 2022. The buildings are public property and solely designated for the purposes of carrying out official control over the quality and safety of food items. The law expressly prohibits third-party use of the buildings as well as use for purposes other than the designated ones. Despite all this, the private company was able to lease the buildings, conducting preparatory activities before the actual checks of loads and laboratory analyses. Meanwhile, BFSA officers were able to carry out control activities on the premises but only when using the private company’s employees as intermediaries.

The lease contract was valid for ten years and was renewed before its expiry date, at 22:26 pm on 31 December 2021. The renewal was signed with a recently established company, Eurolab 2011 EOOD, solely owned by Vasil Dimitrov, a longtime employee of Interpred Eurologistic EOOD.

From February 2012 to April 2022, all official food safety and quality checks at the border crossing  were carried out in the unlawfully leased buildings. Samples for phytosanitary control were tested only in the Eurolab laboratory located in one of the buildings. In addition to the fees for laboratory analyses, the private company was collecting considerable fees for handling the goods subject to controls. This practice, which was tolerated by public authorities over many years for unknown reasons, is in clear violation of Regulation 625/2017 of the European Parliament and of the Council. It also violates the Agro-Food Chain Management Act which stipulates that BFSA is the public body responsible for exercising thorough, effective, and consistent control in order to guarantee food quality and safety.

“We can only guess what was the quality of the food items that were being imported into Bulgaria and the EU from third countries,” said Georgieva. “Consequently, the order was issued by the executive director of the BFSA on the grounds that urgent measures were needed to improve food safety.”

Eurolab 2011 disputed the order in front of the Administrative Court – Sofia City which rejected the company’s claims. The case then reached SAC where a panel, chaired by Lyubomir Gaidov and also including members Emanoil Mitev and Emil Dimitrov, issued a decision in favor of the private company which some media outlets have linked with Hristoforos Amanatidis – Taki, previously wanted on suspicions of drug trafficking.

“While the Sofia administrative court reviewed all the details pertaining to the case, carried out a thorough analysis of the applicable Bulgarian and EU legislation, and issued a decision which – as should always be the case – fully complies with the law, SAC has decided in favor of Eurolab merely on the basis of procedural grounds,” said Georgieva. “The supreme court has ignored mandatory European rules as well as texts from Bulgarian legal acts which clearly stipulate BFSA’s authority.”

As per Regulation 625/2017 of the European Parliament and the Council, BFSA is the public body responsible for exercising official control. All relevant activities – such as obtaining samples for testing, freight handling and others – should only be performed by BFSA employees using equipment which belongs to the agency. While BFSA can decide to delegate some functions to third parties, operators such as Eurolab 2011 have no independent rights. On the contrary, operators are obliged to abide by the rules defined by the bodies of official control (in this case, BFSA).

“This is the mechanism for official food safety and quality checks at the border and it applies with or without the order which Eurolab 2011 has disputed in court”, said Georgieva. “The order itself was issued to deal with a longstanding problem created by the consistent failure to abide by the law.”

Several months prior to issuing the order, BFSA attempted to carry out in full all control activities and to collect the relevant fees stipulated by law. In April 2022, the agency took steps to cancel the lease agreements and end the de-facto monopoly that Eurolab 2011 had imposed on laboratory testing services. The private company opposed the agency, taking concrete actions on the ground and challenging its orders in court.

The decision which SAC issued in December is not the first one favoring the private company. The order that was repealed by the court had been issued by BFSA after another unlawful court decision issued on 19 June 2022. That decision stated that the food safety agency should stop preventing the private company’s employees from carrying out freight handling activities at the border crossing.

As detailed in an earlier analysis by ACF, SAC panels with nearly identical compositions deliberated for a record-setting three days to issue decisions on three separate proceedings related to the case. The deliberations were held during the official court holiday. Another suspicious circumstance is the fact that the proceedings were initiated, assigned, and closed on the same days even though the appeals were lodged at different points in time within a period of more than 20 days.

In addition to the way the proceedings were assigned, which most likely was not – as it is supposed to be – random, there are also significant discrepancies between the issued decisions and the existing legal framework. SAC allowed an appeal on the grounds of Art. 250 of the Administrative Procedure Code despite the lack of grounds for doing so. On 4 August 2022, ACF filed a report with the Inspectorate of the Supreme Judicial Council which failed to identify any shortcomings in SAC’s work.

“The issues at the Kapitan Andreevo border crossing feed into the criticism of Bulgaria fully joining  the Schengen Area and explain why, according to some analysts, our country meets the definition of a captured state. Any delay in addressing this problem will have negative consequences for public health and national security and, with its decisions, SAC is hampering BFSA’s efforts to defend the public interest,” said Stankushev.