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Idea Transcript


Analysis: The Killer Building; Presidential Elections 2006; EU Accession - Closer to Heaven Interviews: Martin Dimitrov, MP; Mark Lumer, Contracting Executive US Army 7 3

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Charit y, Communit y Service, Generosit y

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Business Park Sofia, Mladost 4 Area, Building 2, Floor 6, 1715 Sofia Te l . : ( 3 5 9 2 ) 97 6 9 5 6 5 F a x : ( 3 5 9 2 ) 97 6 9 5 6 9

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e - m a i l : a m c h a m @a m c h a m . b g

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Dear Members and Friends,

Dear Reader,

It is not by chance that we put the article "Shattered Illusions " by Emil Spahiyski before the news from the seminal European Commission report on Bulgaria. This journalist has presented a snapshot of one of the many corruption schemes in the country: an issue that European Union has emphasized as causing serious concerns and requiring immediate action. A four-story building collapsed in downtown Sofia killing two young girls (see page 4). This tragedy was not a mere accident; it was predetermined by the municipal authorities' systematic disregard of the rule of law and heartless attitude toward people. In the past 15 years, downtown areas of Bulgaria's big cities have become de facto construction sites, which included renovations and erecting new structures. Old residential buildings - some of great historical value - have been turned into commercial venues for offices, shops or restaurants. The buildings have been often renovated without any regard for safety regulations. Despite numerous protests by NGOs, warnings by prominent construction engineers and scholars, tragedies happened - and the city administration still remained indifferent! The core of this scandal lies in the corruption pervading Sofia municipality, which has become the rule rather than the exception in issuing construction permits and licenses. State control bodies have also become embroiled in corruption schemes, instead of preventing them. Any attempts to stop that by the means of the judicial system have been unsuccessful so far.

But will this happen? Since the times of the former Sofia mayor Stefan Sofianski and then chief architect Stoyan Yanev, interests of private developers have routinely received priority consideration to the exclusion of everything else. While construction projects flourished, transportation, infrastructure, garbage-collection and environmental problems only deepened.

Then I was promptly reminded a sad fact. Last December, I was meeting with Vyara Ankova, the news editor-in-chief of Bulgarian National Television, and Boyka Bashlieva, president's press secretary, to discuss various charitable activities for Bulgarian Christmas. We were wondering how much would the campaign accrue in donations. How many Bulgarians would sent a one-Lev text message to save a child's life? I remember saying quite cheerfully, "No problem - at the final of the Big Brother television show, a million text messages were sent in just a day. I am sure many more will join in to help sick kids." Alas, between December 2005 and January 2006, donations for Bulgarian Christmas barely breached the 1 million Leva threshold. That is, Bulgarians gave as much during a twomonth charitable campaign as they did in one day of a reality show. Sad, isn't it? In this particular case, the good news was that another million came via bank transfers from various private businesses. While I was working on the issue and reading through articles on charity and community service responsibility, my mood improved. Serious companies always find a way to donate, and the government seems to understand the importance of supporting charitable initiatives. I am proud that AmCham Bulgaria members find the time and funds to aid those in need. I can only hope that after this issue we will all become a bit more generous.

. Best regards, Valentin Georgiev Executive Director

Sincerely, Milen Marchev Editor-in-Chief

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October 2006

As long as we see such Bulgarian politicians representing the country in the European institutions rather than being held responsible for their actions, the fight against corruption will remain a shattered illusion.

So when we decided to make community service responsibility topic of this issue of AmCham Bulgaria Magazine, I felt a distinct sense of guilt. How could I be such a Scrooge?

AmCham Bulgaria Magazine

The European Commission pointed out in its report that the measures against corruption should include further indictments, criminal trials, convictions of the guilty and strict sentences that would dissuade potential wrongdoers.

I must admit that I have never stopped reflecting - until today, that is - whether I am doing enough to help those in need. Indeed, I have sent text messages for donations in favor of the Bulgarian Christmas Initiative, which benefits sick children; I gave money for the victims of the South-East Asia tsunami and Hurricane Katrina. But this seems to be all - unless you count the time when I changed the light bulb in our building myself, after enduring three months of climbing stairs in pitch darkness.

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AmCham Bulgaria Magazine is a primary forum for political and economic analyses, news, viewpoints as well as for the presentation of new business opportunities. The articles in the AmCham Bulgaria Magazine express the opinions of the authors and do not necessarily reflect the position of the American Chamber of Commerce in Bulgaria. Publisher American Chamber of Commerce in Bulgaria Business Park Sofia, Mladost 4 Area Building 2, Floor 6, Sofia 1715, Bulgaria e-mail: [email protected] www.amcham.bg Editor-in-Chief Milen Marchev

Writers: Boyko Vassilev, Marina Tzvetkova, Mina Georgieva, Panayot Angarev, Yuliana Boncheva Advertising AmCham Bulgaria: Nadejda Vakareeva, [email protected] AmCham Bulgaria Magazine: Milen Marchev, [email protected]

Deputy Editor-in-Chief: Christopher Karadjov Senior Editor: Irina Bacheva

AmCham Bulgaria Magazine

October 2006

Layout, Design & Printing: Milen Marchev

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The AmCham Bulgaria Magazine reaches a broad audience of AmCham members, leading US, Bulgarian and international companies, US and Bulgarian decision-makers, all AmChams around the world. Subscription is free of charge. If you would like to subscribe to AmCham Bulgaria publications, please contact the AmCham Bulgaria office.

a m c h a m

Contents

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Board of Directors of the American Chamber of Commerce in Bulgaria President Vice President Second Vice President Treasurer

Mr. Mr. Mr. Mr.

Borislav Boyanov Stefan Dimitrov David Hampson Anthony Hassiotis

Borislav Boyanov & Co. Allied Pickfords Bulgaria Grenville Financial Bulgarian Postbank

Members

Mr. Kenneth M. Lefkowitz Mrs. Olga Borissova Mrs. Tanya Kosseva Mr. George Randelov Mrs. Elitsa Tsaneva Mrs. Maria Vranovska Ms. Evgenia Stoichkova Mr. Christopher Thompson Mr. James Rigassio Valentin Georgiev

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Shattered Illusions . . . . . . . . . . . . . . . . . . . . . .4 By Emil Spahiyski e u

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Closer to Heaven . . . . . . . . . . . . . . . . . . . . . . .8 By Yuliana Boncheva c o v e r

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Give and Save . . . . . . . . . . . . . . . . . . . . . . . .11 Practicing Corporate Social Responsibility at Toyota

Ex-Officio Member Executive Director:

. . . . . . . . . . . . .14

Going Up the River . . . . . . . . . . . . . . . . . . . . .15 Prepared by Elitsa Barakova and Kristina Muglova (Bulgarian CAF); Stephen Ainger (CAF UK) and Susan Saxon-Harrold (CAFAmerica)

Anglo-American School Community Service Program . . . . . . . . . . . . . . .17 By Maria Mihailova p o l i t i c s

Indian Summer Elections . . . . . . . . . . . . . . . . .19 By Boyko Vassilev i n f r a s t r u c t u r e

Government Promises Freeways Finished in 10 Years . . . . . . . . . . . . . . . . . . . . . . . . . .22 a n a l y s i s

Economic Growth Accelerates . . . . . . . . . . . . . .25 i n t e r v i e w

MP: Reforms Are Stalled . . . . . . . . . . . . . . . . .26 e v e n t s

Paul Dyck: More European Union Means More United States . . . . . . . . . . . . . . . . . . . . .28 U.S. Experts Teach Bulgarian Companies Nuts and Bolts of Government Contracts . . . . . . . . . . .30 a m c h a m

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Millions for the Taking . . . . . . . . . . . . . . . . . . .33 l o b b y i n g

K Street Comes to Sofia

. . . . . . . . . . . . . . . . .34

By Irina Bacheva a m c h a m

e v e n t s

Visa Presents Government Services . . . . . . . . . . .36 r e p o r t s

Environmental Expert Presents EU Environmental Liability Directive . . . . . . . . . . . . . . . . . . . . . .38 m e m b e r

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Hopes and Dreams Through Education and Franchising . . . . . . . . . . . . . . . . . . . . . . .40 By Charles Gilbert, Berlitz

CENTURY21 Enters the Bulgarian Market . . . . . . .42

Anglo-American School of Sofia Turns 40, Moves to New Home . . . . . . . . . . . . . . . . . . . .44 s p o r t s

National Golf Tournament Showcases Young Stars, Experienced Players . . . . . . . . . . .46 m e m b e r s

. . . . . . . . . . . . . . . . . . . .48

Moody International Schenker United Medical Communications

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3

October 2006

Privatization Agency Endorses Interim Certificate granted to CEZ for the Purchase of TPP Varnа . . . . . . . . . . . . . . . . . .43

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AmCham Bulgaria Magazine

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3M (East) AG AA KRES EOOD ABB Bulgaria Ltd. AbCRO - Bulgaria Accor Services Bulgaria ACSIOR ADIS Ltd. Advance International Transport (Balkan) EAD AES Corporation AFA OOD AGS Bulgaria Ltd. AIG Bulgaria Insurance & Reinsurance Company EAD AIG Life Bulgaria AIMS Human Capital ALEXANDROV GROUP CORPORATION Allan Collautt Associates, Inc. Allied Pickfords Bulgaria Alter Ego Company OOD American College of Sofia American Construction Products JSC American English Academy American University in Bulgaria (AUBG) Anglo-American School of Sofia Anton Preslavski, Liebert Hiross APIS - BULGARIA Ltd. APOLO Ltd. Argento Human Resource Solutions Aries Commerce Ashtrom International AD Association of Bulgarian Broadcasters - ABBRO AT Engineering 2000 Ltd. Auditing Company Versi and Partners Ltd. Avendi Ltd. AVON Cosmetics Bulgaria Ltd. Balkan News Corporation Plc. Balkan Star Baxter AG Bayer Bulgaria EOOD BearingPoint, Inc. BG Radio BMG Ltd. Bodyguard-Fire-K Ltd. Borislav Boyanov & Co. Braykov's Legal Office Bristol-Myers Squibb Brown Forman Beverages Worldwide Sofia Branch LLC BULBANK Bulgarian American Enterprise Fund Bulgarian Charities Aid Foundation (BCAF) Bulgarian Post Bank Bulgarian Telecommunications Company EAD Business Media Group Business Park Sofia EOOD CA IB Bulinvest CableTel Car Rental Bulgaria Ltd. Carlsberg Cefin Bulgaria EOOD (IVECO dealer) Center for the Study of Democracy Century21® Chelopech Mining EAD Cisco Systems Bulgaria Citibank N.A.- Sofia Branch City University Clockwork Ltd. CMS Cameron McKenna EOOD Coca-Cola Bulgaria EOOD Coca-Cola HBC Bulgaria SA COLLIERS International ConsulTeam Recruitment and Selection Ltd. Cook Communications Corstjens Worlwide Movers Group CPM International Ltd. Curtis / Balkan Ltd. DeConi M&A Deloitte Bulgaria EOOD DHL Express Bulgaria Ltd. Diageo Bulgaria Ltd Diamed Ltd. Dimitrov, Petrov & Kalaidjiev DIMON Bulgaria Djingov, Gouginski, Kyutchukov, & Velichkov Dobrev, Kinkin & Lyutskanov Law Firm Domaine Boyar AD Dr. Emil Benatov & Partners Dr. I.S. Greenberg Medical Center, Ellen Ruth Greenberg, Ph.D. DynCorp International LLC Effekten Und Finanz - Sofia AD Electron Progress AD Eli Lilly and Company Elido (Lamel Ltd.) Elmek Sport Bulgaria EOOD Elta consult AD associated partner of CB Richard Ellis for Bulgaria Emerson Process Management AG Encouragement Bank AD Engineeringservice Sofia Ltd. Epsilon Interactive Equest EAD ERATO HOLDING PLC Ernst & Young Bulgaria Expo Team Ltd. Flying Cargo Bulgaria Ltd. - Licensee of FedEx Force Delta Ltd. Forem Consulting Bulgaria Forton International JSCo General Electric International Genmark Automation Bulgaria GiTy Bulgaria ltd. GlaxoSmithKline Goodyear Dunlop Tires Bulgaria Grand Hotel Sofia Grenville Grey Worldwide Bulgaria EOOD Group 4 Securitas (Bulgaria) OOD Hewlett-Packard Bulgaria Ltd. Hilton Sofia Honeywell EOOD Horizon HVB Bank Biochim AD and HEBROS Bank AD IBM Bulgaria Ideal Standard Bulgaria Industrial Holding Bulgaria In Time Ltd. Infoguard - Stefan Nedkov ING Bank Sofia Branch Intel Czech Tradings, Inc. Interbrands Marketing & Distribution Inc. OOD Interdean Investbank Plc. IP Consulting Ltd. ISI Emerging Markets (Internet Securities, Inc.) Johnson & Johnson Doo. Junior Achievement Bulgaria Kaliakra AD Kamenitza AD Kamor Auto Ltd. Kempinski Hotel Grand Arena Bansko Kolbis International Transfer Corporation KPMG Bulgaria Kraft Foods Bulgaria LANDMARK Properties Bulgaria Lexim Sofia Ltd. Lindner Bulgaria OOD Lirex BG Ltd. Lowe Swing Communications M & M Air Cargo Service BG OOD M3 Communications Group, Inc. A Hil & Knowlton Associate Maersk Bulgaria Ltd. Magnetic Head Technologies Maritza East III Power Company AD Marsh EOOD MARTERN EOOD McDonald's Bulgaria Ltd. Merck Sharp & Dohme IDEA Inc. Meridian Hotels Bulgaria OOD Microsoft Bulgaria Miltech Ltd. Mmd, Corporate, Public Affairs & Public Relations Consultants Mobiltel EAD Monbat Plc. Moody International Moten Sport Moto Pfohe Ltd. Motorola Bulgaria EAD National DISTRIBUTORS NATO Defense College Anciens' Association NDT Equipment Supplies LTD Net Is Ltd. Neterra Communications Neumann International AG New Europe Corporate Advisory Ltd. Nexcom Bulgaria EAD Nu Image Bulgaria EOOD Opet Aygaz Bulgaria EAD Oracle East Central Europe Limited - Branch Bulgaria Orbit Ltd. Orkikem Ltd. OSG Records Management Parsons E&C Bulgaria Limited Pfizer H.C.P. Corporation, Representation Office Bulgaria Philip Morris International Inc. Pioneer Semena Bulgaria EOOD Popov Legal Office PostPath Inc. Pratt & Whitney PricewaterhouseCoopers Prima Soft Ltd. Procter & Gamble Bulgaria ProSoft PSG Payroll Services Ltd. Radisson SAS Grand Hotel Reader's Digest EOOD Rising Force Co., Ltd. Rockwell/Intelpack S&T Bulgaria Sante International OOD Schenker Schering - Plough Central East - Bulgaria SEAF Management Bulgaria EOOD Seplex Law Offices Sheraton Sofia Hotel Balkan Sherita M Ltd. Sienit Ltd. SigmaBleyzer Investment Group LLC - Representative Office Soravia Bulgaria Ltd. Stefan Dimitrov, Norman Management Co. Ltd. Symix Bulgaria TechnoLogica EOOD TeleLink AD Tero Halmari, European Bank for Reconstruction and Development (EBRD) The American Research Center in Sofia The Atlantic Club of Bulgaria The Executive Centre Tishman Management Company Ltd. Tissue Bank Osteocenter Bulgaria EAD TM Auto Ltd. TMF Tumbleweed Communications EOOD Unimasters Logistics Group AD Unisys Bulgaria Branch United Consulting Ltd. United Medical Communications Urban 2000 Ltd. Vaptsarov Joint Stock Company Vector Management Bulgaria EOOD Videolux Holding / Technopolis VIP Security Ltd. VISA International Service Association VSK Kentavar Ltd. Westinghouse Energy Systems Bulgaria Branch World Courier Wrigley Bulgaria EOOD Xerox Bulgaria Ltd. Yavlena Ltd. Zlati Dinev Studio in partnership with Outerbridge/Morgan

. .

By Mina Georgieva

a m c h a m

New Europe Corporate Advisory AUBG, Director European Programs Landmark IBM Bulgaria Ideal Standard Bulgaria Eli Lilly and Company Coca-Cola Bulgaria Bearing Point, CLRP US Senior Commercial Officer

a n a l y s i s

Shattered Illusions A building collapsed in downtown Sofia, killing two girls and exposing a rotten system By Emil Spahiyski Buildings fall everywhere in the world because of age, nature, human activity, or folly. In Sofia, too, a building collapsed and buried beneath two girls. The case is special. It is representative of the vicious property acquisition system and construction in Bulgaria. A system rotten with indolence, corroded by corruption and fed by a multitude of interests and a feeble justice system. The building is located, sorry, was located just a few feet away from the courts of justice, facing the National Bank, a five-minute walk from the office of the president and the Council of Ministers, and just opposite a borough city hall. There seems to be something symbolical in its collapse.

Preordained fall The four-story building at 39 Alabin St. was for a long time known mainly for the brand-name clothes and shoes sold on the ground floor. Otherwise, because of unsettled ownership rights, it had remained unoccupied for years. A week before the fatal Sep. 19 the owners moved in and started repairs.

AmCham Bulgaria Magazine

October 2006

The way in which the construction works began was a tragedy in the making. The building was erected more than 70 years ago and its structure was quite specific: any intervention would make it unstable. Moreover, it was registered as a monument of culture, which made the obtaining of permits an even more cumbersome procedure.

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To avoid time-consuming dealings with the authorities, the owners started illegal repairs. While that continued, the workers damaged the supporting and stabilizing structures. Just a few hours before the building collapsed the workers were inside, taking out beams and demolishing walls. Suddenly they started hearing strange noises. The men felt that there was something wrong and left the building before the workday was over. Only the security guards remained in the building.

Firemen are exploring the remains of the building at 39 Alabin street downtown Sofia after the four-story structure collapsed.

a n a l y s i s

It is a little strange for three armed men to guard an empty building but probably knowing that something illegal was going on inside, the owners had decided to insure themselves against possible checkups. Obviously a lot of people were worried by the repairs. That is evident from a tip-off received on the fatal day, when someone called and warned of illegal construction works going on at 39 Alabin St. That might cause an accident. At 5:45 p.m. on Sep. 19 the noises of the building became increasingly frightening to the guards. Dozens of people were down on the street, caught up in the traditional evening jam. They did not realize the threat. At 6:05 p.m. a large piece of plaster came off and smashed on the sidewalk. The owner of a Mercedes saw that and moved his car to avoid damage. He was of the lucky ones on that day. Shortly after he left, more slabs came off. The pedestrians, frightened, instinctively crossed the street to the opposite sidewalk.

fly off any moment." Two innocent girls died in that instant. The whole facade crashed onto their Peugeot stuck in the traffic jam. Nothing remained of the car, as if it had been smashed in a press. Pieces of bricks were flung into a few more cars. It is a miracle that nobody else got hurt. But the security guards missed to do something more than run away and save their own skins. A minute later, ambulances and fire trucks started to arrive at the place. The police cleaned up the scene, looking for more people buried under the debris and trying to take the girls out of the crushed car. They did not know how many there were, nor who they were.

Could happen to anyone It is frightening to think that anybody could have been in the girls' place. It is even more frightening to say that downtown Sofia is dangerous.

At 6:06 p.m. the security guards rushed away, having seen the walls sag. On the last floor of the building next door two journalists from Standart Daily were sitting smoking and discussing some articles.

During the past couple of years, four people have perished in this area of the city alone as a result of lack of control over construction and repairs. A passer-by was killed by piece of plaster in Garibaldi Square; one died of an electric shock at the fountain in Slvaveykov Square; now, these two girls.

"First the floor began to shake and we thought that that was an earthquake," says one of them. "Then the roof below us started to give way and sank with a terrible roar. Then there was a crash and everything disappeared. We felt as if we were in the air and would

Of course, that caused a lot of stir about the dangerous buildings in Sofia, which turned out to come in dozens. Mayor Boyko Borissov threatened to demolish them and inspect all construction sites. Statements from a multitude of politicians followed the same line. But we can be

more than sure that there will be no consequences. At least not the consequences we as citizens desire. Why? Because no matter what we get into, we always reach to corruption and to lack of transparency in what companies and officers do.

Ownership change an obscure business The fall of the building was predestined, given the fact that the transfer of ownership from ex municipal-owned BSK Sredets into private-owned Hrisoma was accompanied by some shady dealings. The building may have looked abandoned, but it was built on golden land (and now even cleared for new construction). When such deals are made, none of the parties needs transparency. We all know why. Most municipal properties that went into private hands were sold for well below their market price. That concerns apartments, buildings, shops (small and large ones); that concerns hundreds of properties from which the municipality has lost millions. But when someone loses, someone else gains. If the municipality, i.e. the public, has lost millions, someone else has gained millions. It is not unusual that politicians are always involved in such deals, because a shadow presupposes an umbrella. The tragedy with the fallen building, too, brought to the surface parties, politicians, and their relatives. It is obvious that business and politics have intertwined into common deals and interAmCham Bulgaria Magazine p a g e

October 2006

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a n a l y s i s

ests, which is disturbing in itself. It is disturbing that the authorities shut their eyes to the utterly brazen way in which buildings are repaired and constructed (not only in Sofia). Buildings are being erected near water reservoirs, in nature reserves, parks, gardens and even in places dangerous to the owners themselves. There are dozens of buildings in the capital city the ground floors of which have been remodeled into shops: reconstruction that puts at stake the structural integrity of the whole building. It is full of buildings designed in one way and then redesigned and superstructed with the tacit agreement of the controlling bodies.

False supervision You may ask: But don't we have laws? A tragedy like that on Alabin St makes politicians change the laws. New laws are drafted, stricter regulations and penalties are adopted. But that is more of an obstacle than help. It hampers the activities of law-abiding companies. There are so many and such tough requirements concerning change, repair and construction that developers prefer to circumvent the law and officers prefer to extort businessmen and add something to their incomes.

AmCham Bulgaria Magazine

October 2006

One thing makes it clear that there is no political will to put an end to that essentially criminal activity. No matter how many laws are drafted and regulations revised, nobody has made anything to establish civil control on construction yet. The creation of an easily accessible register and the appointment of an independent body would allow neighbors, competitors and journalists to quickly detect illegal repairs, construction and reconstruction.

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A reformed justice system would easily turn tip-offs into legal proceedings and entail financial and punitive measures on the offenders. Seems as simple as 1-2-3, right? Corruption is everywhere, but in Sofia it obviously kills people as well. It is despairing that Bulgarian politicians have no will for real reforms and that is probably the reason why Bulgarians are happy with the "political board" imposed by the European Commission. Brussels seems to be the only real opposition in Bulgaria. ■

Construction workers have to destroy the standing remains of the building in order to secure the site.

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Closer to Heaven Bulgaria and Romania join the EU on Jan. 1, 2007, but under special supervision. The European Commission's report sparkled disputes as to how many types of membership cards Brussels issues By Yuliana Boncheva

AmCham Bulgaria Magazine

October 2006

EU Commission President Jose Barroso (L) and Enlargement Commissioner Olli Rehn during the Plenary Session in Strasbourg Tuesday 26 September 2006.

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Bulgaria and Romania can now get the fireworks ready and chill the champagne for Jan. 1, 2007. The European Commission's report has cleared all doubts that their EU entry can be postponed by a year. The EC recommended that the two countries be admitted to the EU according to the enlargement schedule. The good news about the firm entry date, however, was clouded by special measures and conditions envisaged as a precaution. The Commission's report, which was announced on Sep. 26, contains a list of benchmarks. If the newest EU members fail to fulfill them, they will be punished with sanctions unprece-

dented in EU history.

European funds.

The to-do list

Weaknesses

EC's report on Bulgaria's (un)preparedness for EU membership consists of 26 chapters in 48 pages. Two are the most often repeated phrases: "concerns persist" and "immediate action." The areas of concern are well known from previous Commission reports. Brussels recommends that Bulgaria press on with the reform of the justice system, cope with organized crime, present clear evidence that it fights corruption through investigations and legal proceedings. Other problematic areas are agriculture, food safety, and the control over the spending of

EC's report pinpoints the Achilles' heels of the two Balkan states. For Bulgaria, there are six areas "causing serious concern and requiring immediate action." The areas for Romania are four. Bulgaria ● Delay in setting up an Integrated Administration and Control System (IACS) in agriculture; ● Delay in building facilities for collection, disposal and treatment of animal products: quite a sensitive issue because of the mad cow disease;

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Lack of results in the investigation and prosecution of organized crime networks; Not quite efficient enforcement of laws related to the fight against fraud and corruption; The fight against money laundering needs to be intensified; Efficient control is needed on the absorption of Structural Funds and the Cohesion Fund.

Romania: IACS has not been built; ● The agencies for direct payments to farmers and those managing the other instruments of the common agricultural policy are not ready; ● The facilities for collection and treatment of animal by-products are not ready; ● The information system for tax management is not ready to be connected to the networks of the EU countries that has to facilitate VAT collection throughout the European market. ●

Without precedent To make sure that progress will be made in the problem areas, Brussels has resorted to means unprecedented in EU's history to influence the two countries. Such for instance is the threat that their portion of the huge European funds will be trimmed due to corruption and weaknesses in administration. Also unprecedented is the strict monitoring that will accompany the start of Romania and Bulgaria's membership. The measure is called a "mechanism for cooperation and verification of progress after accession."

hundreds of millions of Euro. The sanction can be imposed not only in 2007 but also in the coming years. Martin Dimitrov, a Bulgarian right-wing MP and observer at the European Parliament, says that no matter how you call the safeguard measures, their price will be high. "Trimmed subsidies, a ban on the export of certain foods - such actions will definitely hamper the access of Bulgarian companies to the European market. When Bulgarian businessmen export products to the European Union the conditions for them will be worse than when European businessmen export goods to Bulgaria," Dimitrov said. The commentaries in the Western press on the report were surprisingly diverse. Some accused the EC - that is, the European government - of being excessively demanding and demonstrating a discriminatory attitude to the Balkan couple. Others criticized the European politicians for hurrying to issue EU membership cards #26 and #27, as they could not cope with more pressing issues. Britain's The Independent wrote that just like the previous waves of enlargement to the East, Romanians and Bulgarians can be justified for feeling second-rate European citizens. Just like in Poland's case, the products of the Romanian and Bulgarian agriculture will only have a limited access to the EU markets. That is partially due to legitimate health considerations, but the doubt remains that that is also a protectionist measure of the current member states, which fear that the common agricultural policy of the EU may fall under the weight of Polish pork and Romanian milk, The Independent commented.

What "prepared" means

Also, many recall that Portugal, Greece and Poland were no better prepared at the time they were admitted to the European family. Then why that strictness to Bulgaria and Romania? Because we have learned our lesson from the previous EU enlargement in 2004, enlargement Commissioner Olli Rehn admitted.

Visible obstacles and hidden threats In fact the strict measures planned by Brussels have much deeper roots. The actual problem is not that Brussels has left loopholes for a drastic cut in the subsidies of the new members. There will be reductions only if Bulgaria and Romania prove themselves unable to cope with the management and absorption of the ample funds. If the local agencies managing the European funds are not up to standard they will simply not receive certification by the respective EU bodies and will not be able to allocate the amounts budgeted by Europe in support of the two countries. That is the real threat: if Bucharest and Sofia fail to organize their own systems for absorption of the generous European funds. That is also the reason for the critically poor absorption of the current pre-accession funds. So it is all up to the executive authorities in Sofia and Bucharest, not to Brussels. EU will surely cut the funds if it finds out that the chief manager of the European grants is corrupt. That is reasonable strictness: it will punish those corrupt officers, politicians and crony companies that have embezzled the lion's share of the subsidies. The rest of Bulgarians and Romanians will not object to such actions at all, as they welcome all measures against graft. It is the hope that with EU's help the power of white-collars workers and cheap politicians will be substantially limited that is one of the serious reasons for the citizens of the two Balkan countries to strongly desire

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The eight Central European countries, which have been members of the EU for more than two years already, also experience and cause problems with their weak public administration. As far as corruption and organized crime are concerned, these problems plague Italy, Hungary, and Germany, too. It is true that the gross domestic product and incomes of Bulgarians and Romanians are the lowest in EU's history. But we should

remember that some ten years ago Ireland joined the Union as a poor farming country and now it is among the best high-tech performers, while Greece, Spain and even Germany and France can only be jealous of its economic growth rates.

AmCham Bulgaria Magazine

Every six months Brussels will carry out inspections to verify the implementation of the benchmarks and Sofia and Romania will report on progress in addressing them. The first reporting period has already started and will finish on March 31, 2007. That date is even more important than January 1. Because at the end of March it will become clear whether Brussels will fulfill its threats to invoke the safeguard measures. Until then properly functioning financial management and control systems have to be in place for the agricultural funds. Otherwise the funding envisaged in support of farmers in Bulgaria and Romania will be cut by 25 percent. That means that the newest member states will lose

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applied depends on their own efforts and progress.

Pre-Christmas emotions Now that EC's report has been published, there are a few more things that have to take place before Romania and Bulgaria's actual accession. The Commission will present its report to the European Council, which is the standing body of the member states. If some countries have objections to EC's report, they can share them at the forum. The European Council will sit in the middle of December. For the last time then it will be presided by Finland, which will have the honor of announcing the completion of the European Union's fifth enlargement round. Meanwhile, the ratification of the two Balkan countries' treaty of accession to the EU has to be finalized. The parliaments of Germany, Denmark and Belgium have to say 'yes' to Bulgaria and Romania's membership. EC President Jose Barroso has already urged them to ratify the document as quickly as possible.

EC also to enlarge

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8 days after the European Commission approved the Monitoring report on the state of preparedness for EU membership of Bulgaria and Romania, the head of the EC Delegation to Bulgaria Dimitris Kourkoulas was awarded with the highest distinction of the Republic of Bulgaria. At a ceremony in the Coat of arms hall in the Presidency on October 4, 2006 the Bulgarian head of state Georgi Parvanov conferred the Stara planina - first degree order on Mr Kourkoulas. Ambassador Kourkoulas is honoured with the highest state order for his exceptional merits for the development of the Bulgarian - EU relations, for promoting the Bulgaria's prestige as a reliable partner and future EU member, and also for the completion of his term.

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EU membership.

Portugal.

Second rate, third rate

It is a fact that the poorer and less reformed countries in the EU more often raise the question about inequality. Have your heard entrants Slovenia or Cyprus, which are comparable with the EU veterans in terms of income, to complain of unfair treatment?

During the debates on EC's report in the European Parliament voices were heard that the countries admitted in 2004 had been treated as second-rate members and that Romania and Bulgaria would even travel third class on the European train. To forestall such speculations, European Commission President Jose Manuel Barroso stated that the possible measures would in no case place Bulgaria and Romania into a lower category. He recalled that safeguard clauses had been envisaged for other countries upon accession, including for his native

It is also a fact that Bulgaria and Romania can only blame themselves for the conditional membership. The European Commission, just like the ordinary citizens of the two countries, is deeply convinced that if the authorities do not feel a sword of Damocles hanging over their heads there will be no reforms. It is a fact that whether the special measures and sanctions will be

The European Commission will also expand. The new member states will have their "ministers" in the European government. The president of the European Parliament has already taken a decision that the future commissioners from Bulgaria and Romania will be elected in the beginning of January 2007. In late November the candidates for the posts have to appear for hearings at the respective committees. The European Parliament will vote their nominations at a special plenary session on Jan. 4. Sofia and Bucharest have not yet officially discussed nominations.

Getting wiser? Latest public opinion polls in Bulgaria show that support for membership remains very high: about 70 percent. At the same time only 30 percent view EU entry as a panacea - the other 70 percent are well aware that the EU is not a magic wand solving problems overnight. That is excellent news, because until recently Bulgarians trusted Brussels more than their own powers. ■

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Give and Save Rules on the taxation of charitable donations are still in development - here is a example on dos and don'ts You want to donate money for charity in Bulgaria? It is still a tough proposition. You cannot simply give your money to a sick child or pay for the education of a young talent. In order for the state to recognize your gesture, the money for charity has to be paid through legal financial entities only: foundations, nongovernment organizations etc., which are registered at the tax services. Despite this unpleasant detail and a couple of other small hindrances, Bulgaria has been recently doing a lot for charity. Technological progress also helps. SMS donations are already the most popular but the VAT paid on them goes directly to the state and does not reach those you want to help. o n e

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The biggest amount of charity money last year was raised through SMSs and telephone calls. The Bulgarian Christmas campaign alone, which was held under the auspices of the president of Bulgaria, raised 2,011,751 Leva.

Tax relief for donors People who make donations to the Bulgarian Red Cross, budget-subsidized health establishments and schools, the disabled, initiatives for the preservation of cultural and historical monuments, non-profit non-government organizations, the Energy Efficiency Fund etc. have the right to deduct up to 10 percent of their taxable income. Donations can be made in cash or in

kind (property, equipment), foreign currency, securities, etc. In this case the donations are estimated on the basis of the price paid by the donor up to three months before the donation. Otherwise the value is determined by various criteria: the BNB rate is used for donations in foreign currency and precious metals; the purchase price or the tax evaluation of the property, whichever is higher, for real estate; and the market value for securities. The donations made by individuals, companies and freelancers to the Fund for Medical Treatment of Children have been recognized since last year. The relief for such donations is 50 percent of the taxable income, because the resources are intended for expensive

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Tax relief for legal entities According to the amendments to the Corporate Income Taxation Act (Art. 35, Para. 2), which entered into force on Jan. 1, 2005, companies can report donations as expenses exempt from withholding tax and thus directly reduce their financial result. If donation expenses exceed 10 percent of a company's profit, the surplus is added to the financial result and levied a corporate tax.

To be eligible for tax relief, however, companies have to meet two more conditions: ●



the donations shall not benefit the managers providing them, nor those spending them; evidence is required that the donation has been received.

Tax relief for natural persons

AmCham Bulgaria Magazine

According to the Natural Persons' Income Taxation Act, individuals donating to the persons, institutions and organizations listed in the Corporate Income Taxation Act can use the same tax relief to the amount of 10 percent of the taxable income, except for donations to the Fund for Medical Treatment of Children, where the relief is 50 percent. p a g e

Another condition for tax relief is that donors should not have outstanding debts to the state, as declared in a tax statement or established by an audit, as at the time the donation is made. Tax relief can be used by people with incomes received under employment agreements; sole proprietors either registered under the Commercial Code or not; free-lancers and other people working on a non-salary basis; persons performing managerial and controlling functions for consideration.

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The rate of the withholding tax on donation expenses is 17 percent. The tax also has to be paid by legal entities making donations to non-profit legal entities for private benefit. The relief applies to: donations in favor of health and medical establishments; specialized institutions for social services; medical and social care facilities for children and homes for children deprived of parental care under the Medical Establishments Act; nurseries, kindergartens, schools, universities or academies; budgetary enterprises within the meaning of the Accountancy Act; legally registered religious faiths; funds supporting people with disabilities; specialized enterprises or cooperatives for people with disabilities; supports for the disabled; victims of natural disasters, industrial accidents and catastrophes or their families; the Bulgarian Red Cross; supporting the socially disadvantaged; supporting sick children or orphans; restoration and preservation of historical and cultural monuments, cultural institutions, or supporting cultural, education or scientific exchange under agreements to which the Republic of Bulgaria is a party; non-profit legal entities registered at the Central Register of Non-Profit Legal Entities as performing

activities of public benefit; scholarships established and granted for education of pupils and students at Bulgarian schools; municipalities; the Energy Efficiency Fund; the Fund for Medical Treatment of Children.

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In January 2006 the Bulgarian Red Cross delivered food and blankets to the devastated by floods areas near Novi Iskar.

procedures abroad. Disabled people who have lost more than 50 percent of their ability to work can reduce their taxable income by twice the size of the tax-exempt income minimum for the respective year for all incomes received.

AmCham Bulgaria Magazine

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The tax relief for donations is used after all recognized expenses, social security and health contributions, and installments for unemployment and life insurance are deducted from the taxable income. Donations can also be deducted by lessors, as well as by people working under employment agreements only.

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The tax services recognize donations only when the money has been transferred to the entities specified by law. Donors should not have debts to the state as established by an audit. All accompanying documents, such as donation certificates, bank transfer documents etc., have to be attached to the donation dossier. From 2007 the tax relief will be waived

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Number of changes were made in the Bulgarian legislation in late 2004 and in 2005, which substantially contributed to improving the tax environment for donations. However, for the first time in Bulgaria drastic differences were introduced in tax treatment: 50 percent tax relief for donations to the Fund for Medical Treatment of Children and 15 percent for donations to culture. That gives advantage to certain causes and the non-government organizations that promote them, which is unjust and ungrounded. That is not so much due to certain preferences on the part of the legislator as to the lack of a comprehensive strategy for the drafting of laws that regulate donation and the organisations working for the benefit of the public. In December 2005, the 40th National Assembly approved the Patronage Act. The law provides for a 15-percent relief concerning gross income tax and profit tax for donors to Bulgarian art and culture. In addition, when the donation is made in non-excisable goods or services it is exempt from VAT. The aid is envisaged to be provided directly or indirectly, i.e. through non-government organizations supporting culture - in such cases the intermediary can keep up to 5 percent of the donation. A lottery will also be organized in support of culture under the regulations of the Gambling Act: at least 75 percent of the proceeds will go to national funds supporting the creation of works of culture. for donations made by natural persons to disabled people, according to the law. A total of 750,000 people with disabilities are currently registered in Bulgaria and the donations to them increase rapidly every year as a means of evading taxes. The treasury loses more than

6 million Leva from that.

Parliament's new proposals According to a bill recently sponsored by Simeon II National Movement's MPs Mariana Assenova and Plamen Kenarov,

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0.10 Leva a month shall be deducted from the wages and salaries of working Bulgarians for the medical treatment of seriously ill children. The deductions will be transferred directly to the BNB, the control will be exercised by the Audit Office and the parliament. According to the draft, the ministers of health and finance and representatives of the Bulgarian Medical Association will sit on the management board controlling the collection of funds. The money will be channeled to the bank accounts of children waiting for medical procedures. According to Plamen Kenarov, some 3 million Leva will be raised every year that way. In his words an option is being sought to give a legal form to the proposal that the money donated for charity by natural persons and legal entities be recognized as expenses and exempt from taxes. The so-called tax loopholes for individuals and sole proprietors are officially regulated by the law on natural persons' income taxation. The Bulgarian constitu-

On June 1st, Children’s Day, the Bulgarian Red Cross delivered presents to handicapped children in Isperih.

tion stipulates that any tax concession or surtax shall be established by a law. Up to 10 percent of the annual taxable income can be deducted for installments made for voluntary pension insurance and voluntary unemployment insurance.

The "privilege" can be used by people working under employment agreements and contracts of service, sole proprietors and free-lancers. Another up to 10 percent can be deducted for installments for voluntary health insurance and life insurance.

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Practicing Corporate Social Responsibilit y at Toyota Manager presents company philosophy, philanthropy; hybrid Prius coming to Bulgaria in November Toyota was ahead of its time in recognizing early that if you want to be successful in the long term, you have to contribute to the society you operate in. This thinking is now embedded in the company’s philosophy. The company has just published a leaflet titled Contribution Towards Sustainable Development, which will be distributed to every Toyota employee around the world. In Bulgaria, TM Auto (the official distributor of Toyota) organized a team-building weekend for its employees devoted to

they are in Purchasing, Finance, Sales, Aftersales, HR or wherever. The pamphlet underlines the fact that we work for the company and know what our company stands for."

Toyota's Crets: How to put CSR into action "CSR, as defined by Toyota, is essentially about the simultaneous management of the economic, environmental and social performance of the company. It is

Stefan Crets, manager of the CSR Department at Toyota Motor Europe's headquarters in Brussels, delivered a presentation on his company's social responsibility philosophy

example, an environmental gap represents an opportunity to make an environmentally friendly car like Prius or the new Lexus RX400h - and thus becomes an opportunity rather than a risk, enabling the company to meet consumer demand at the same time as meeting environmental challenges.

Participants learned a great deal about corporate social responsibility during the presentation organized by TM Auto for its employees.

AmCham Bulgaria Magazine talked to Stefan Crets, manager of the CSR Department at Toyota Motor Europe's headquarters in Brussels, who delivered the presentation. He agreed to identify for us the pressing need to develop stronger internal and external communication of the company's approach to CSR.

not an easy balancing act. Maximizing economic performance - i.e., by satisfying the global demand for cars and achieving the necessary profitability to fulfill shareholders' expectations and maintain employment levels - might be completely contradictory to environmental performance concerns, because those very vehicles and the plants that build them produce emissions. Toyota is very aware of this contradiction and constantly asks itself how it can improve the situation without damaging its own economic base.

"The Contribution Towards Sustainable Development leaflet reinforces Toyota's ideas and values in terms of CSR," Crets said. "It is an effort to communicate them more explicitly to employees. Toyota is a business committed to society and this is something employees at every level in the company can contribute to, whether

A vital way of looking at this is through a model that uses a risk-based approach. The questions will be what is the social, economic and environmental performance on one hand, and on the other, what are society's expectations? Where are the gaps, and what risks or opportunities do these gaps represent? For

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Corporate Social Responsibility (CSR). At the seminar, TM Auto announced that the hybrid vehicle Prius is going to be introduced in the Bulgarian market as early as November 2006.

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Toyota asks itself how it can improve its management systems to deal better with these challenges. As such, it is coordinating a number of projects in collaboration with different divisions within Toyota Motor Europe - Purchasing, HR, After Sales, Legal. CSR development will assist Toyota and TM Auto in particular in ensuring its long-term profitability and to fulfill its role as a good corporate citizen. It also links to Toyota's social contribution - its philanthropy. The CSR Department also operates a grant system whereby the Toyota Fund for Europe gives grants to environmental NGOs, road safety NGOs and in the field of technical and engineering education. Toyota seeks to find out their opinions about what are the main social and environmental issues on the horizon, and about how they see the evolution of the car industry and how the company can improve its role in this. Philanthropy is not just about giving money, then, but also about creating partnerships." TM Auto has been a member of AmCham's CSR Committee since its foundation in November 2005. ■

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Going Up the River Prepared by Elitsa Barakova and Kristina Muglova (Bulgarian CAF); Stephen Ainger (CAF UK) and Susan Saxon-Harrold (CAFAmerica) Let's start with a story I read years ago. It is about a man standing on the bank of a river. He suddenly sees a baby drawning down the waves. The man jumped to save the baby. The next day same thing happens again. And the next day, and the next day. Some time later the catcher decides to go up the river and see who is throwing children in the water. He starts fighting these men. There are more and more men coming, and there is more and more fighting. So some time later, the catcher thinks about what makes these men come and throw their kids and he goes further up the river, seeking a change.

about the necessity to be transparent in their finances and activities, together with taking steps to report charitable giving that is both effective and impactful. Some 120 representatives of not-forprofit organizations, companies and business associations attended and participated in the event. The conference provided an excellent opportunity for sharing contemporary data about local and international practices and success stories in the area of philanthropy.

zations, effective cause related marketing, introducing employee volunteering and giving from the workplace.

Impact of the Not-for-Profit Sector By Stephen Ainger, CEO, CAF - United Kingdom CAF UK holds more than 2 billion Euro on behalf of donors and charities. Charities have entrusted 1.5 billion Euro of their cash with CAF Bank, the bank

I like the story as it describes the path of changing the way we can contribute to social well being. Saving children is as necessary and as valid as creating environment to prevent their parents mistreating them. It is an individual process of choice and maturing. Helping people on different parts of the river is the mission of Charities Aid Foundations in different countries, on six continents. CAF is the not-for-profit organization which is committed to effective giving, providing a range of specialist services to donors, companies and charities in the United Kingdom, and internationally. Yana Georgieva from Women with Cancer Association receives the first prize in Effectiveness Awards.

"Committed to effective giving" conference Conference attendees were reminded

The participants in the conference had the opportunity to listen and discuss the experience of CAF international offices from the United States, Russia, India, Brazil, Australia, Southern Africa and the United Kingdom. The workshops examined topics as broad as fundraising, corporate social responsibility, social investment, partnership with nonprofit organi-

for charities. Over 380,000 employees give more than 100 million Euro every year through payroll, CAF distributed over 400 million Euro to 50,000 charities across the world on behalf of donors in 2005/06 In the United Kingdom giving is well over GBP 12 billion plus per annum, with government funding to non-profit sector a similar amount; people have a right to know where the money is going, and what is being done with it. The donors are increasingly, and rightly, asking what difference has it made. In the private sector there is a huge army of people, an industry in its own

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Bulgarian CAF is a professional intermediary organization, offering information and support to individual givers and corporate community programs. For the first eight months of 2006, BCAF has raised more than 220,000 Leva from individuals and companies in Bulgaria and is helping the work of some 25 organizations.

The conference was sponsored by CAF International and BNP Paribas. The jury and the audience awarded three Bulgarian not-for-profit organizations for their effectiveness in promoting and gaining financial support for their causes: Association of Women with Cancer; Green Balkans - Stara Zagora; and a Doze of Love - Bourgas.

AmCham Bulgaria Magazine

For its 10th anniversary, Bulgarian Charities Aid Foundation, part of the CAF network, hosted an international "Committed to effective giving" conference on Sep. 18, 2006.

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right, dedicated to the monitoring and analysis of company performance. Whether it is a product, or a range of services, the 'for-profit' enterprise is dependent on its ability to win customers, to perform for those customers, and hopefully keep them; to do it better than the competition, to add value and deliver. Donors - the high net-worth individuals, companies and governments - are increasingly bringing the practices of private-sector investment to bear on the not-for-profit marketplace. Questions about effectiveness in approaching problems, outcome for beneficiaries, value added and cost-effectiveness of expenditure are to be answered. It is clear that charities need to say more about how they measure success, using objective indicators. There is no single solution to the issue of measuring the impact and effectiveness of charities. Unlike the private sector where there is an economic imperative to drive performance, the imperatives driving the accountability, performance, indeed the very existence of some organizations in the third sector, are not so simple to discern.

23 non-profit organisations competed for the Effectiveness Awards demonstrating their achievements to the visitors of the Exhibition during the conference

So what does this mean for CAF in Bulgaria and elsewhere?

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Our challenge in the coming years is to help drive the sector towards a way of working that will help measure impact. The sector is making progress on impact reporting but unless we accelerate that work we will increasingly find ourselves unable to meet the needs of our stakeholders and ultimately lose their trust.

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There is much to be done, but I am convinced that CAF, with others, can help deliver a new culture of transparency and reporting that will place 'impact' in the hands of those who want to know our donors, funders and corporates, without which the work the sector does would not happen.

Opening panel of the Effective Giving Conference. Stephen Ainger, CAF UK speaks about transparency and impact after the opening speech of Michael Tachev, chair of BCAF

safe, easy and effective charitable solutions for international grantmaking. We are a U.S. registered 501(c)(3) public NGO, which enables us to receive taxdeductible contributions from U.S. donors. CAFAmerica makes over 1600 grants a year to nonprofits in 72 countries. US private giving topped $260 billion in 2005, and 15 percent of those donations are given internationally to charities. Many use CAFAmerica to do so because of the tax benefit to them.

Engaging U.S. Donors by Susan Saxon-Harrold, CEO, CAF America CAFAmerica's mission is to stimulate U.S. global giving by assisting Americans and corporate donors with

I would like to say to all Bulgarian nonprofits present at this conference that there is no time like the present to seek out new sources of income to replace their overdependence on foreign foundations. I am glad that the conference

exhibition reveals the enthusiasm for work of Bulgarian nonprofits. A U.S. company working in Bulgaria can help a local nonprofit build a diverse income base by making grants or encouraging their employees to give time or money. Companies should not forget that a U.S. company may well have an international matched giving program where local employee giving and volunteering to nonprofits are matched by the U.S. headquarters. Paying the annual administrative cost of $3,000 for raising money by U.S. Bulgarian Diaspora via a CAFAmerica 'Friends of Charity Fund.' is another way of support. U.S. companies can also fulfill a valuable role by offering employee expertise to help build capacity in nonprofits. ■

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Anglo-American School Communit y Service Program By Maria Mihailova The Community Service Program (CSP) has existed for several years at AAS and although it has its important place in the school life it is completely voluntary. During the last 11 years the program has developed substantially. It started as a single donation of food and clothes to an orphanage in Gorna Breznitsa in 1995, and now it functions as a well-structured and well-planned social program which involves everyone at the school on a voluntary basis. It now has a special page in our web-site. Mission of the Program: The CSP aim is to help needy places in the host country, but above all, "to enhance academic, personal, social and intellectual growth by instilling students with a sense of compassion, justice and responsibility in their quest to develop as global citizens", as defined in the mission statement of the program..

AAS lower school student (left) shares time together with a child from the Mladost Orphanage

The Goals of the program are: ● To integrate community service into the school's programs; ● To blend service into learning activities in such a way that both service and learning are enriched; ● To involve students actively in the service learning process: planning and preparation; implementing a project, reflecting and assessment, acknowledgement; and ● To develop a service learning program at school, within the community and in a more global context.

Roma School, 75 State School in Sofia School for the Deaf and Hearing Impaired Children, Buckston ● "Alexandrovska" Children's Pulmology Hospital ● Otec Ivan Orphanage, Novi Han- added in this year's program Value: The social impact is un-measurable - the real measures are in the disadvantaged people's hearts.

The Target Groups/ Buddy Places ● Baby Orphanage in Zone B-5 ● Elderly People's Home in Zone B-5 ● Hospice "Milosardie" - hospice for old and very sick people ● Faith, Hope and Love Center for Street Children

The school has established a system to pair each class to a needy place in Sofia in order to establish a year-long relationship. Each class chooses to work with a buddy place through the year. The service includes a wide range of social activities rather than simple donation of gifts and money only.

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For example: AAS children from different age groups make regular visits, perform plays, sing songs or cook together with people from the Old People's Home. Grade 8 students regularly visit Milosardie Hospis and chat with the sick and old people. Baby orphans from the Mladost orphanage come to school and joined in class activities of our kindergarten class. The School of the Deaf students have an art class or play soccer and other games together with our students. There is always a two ways benefit - AAS children learn to help the needy and the elderly people and disadvantaged children see us as friends in us and enjoy the natural human attention they may

received a new playground facility together with new friends from the near neighborhood to play with. Students from the Roma School were encouraged to raise money for Cancer Research. In September 2005, AAS children helped their buddies from the Roma school to raise 160 leva by running for health. 1000 leva was donated to the Terry Fox International - Foundation for Cancer Research. The event was also enriched with a concert performance in which the Roma school, the School of the Deaf , and AAS students took part. Money was raised for the purchased 10 new electric inhalers for the Department "G" at Alexandrovska Pulmology Hospital along with new sets of bed sheets chairs, hangers, books and toys. Each AAS class created art work, which were exposed in the rooms of the department.(amount was over 2000 leva) The Tsunami victims in Asia were supported by 3000 leva raised by AAS students a month after the disaster. To achieve this amount students organized every week in January 2005 a concert for parents and teachers, with an entrance fee; A photo exhibition on Tsunami topics make visitors aware of the tragedy and encourage them to participate in the campaign. Grade 3-4 helped their parents at home with the household work, and were paid for the job done. Grade 2 printed a calendar with their artworks and sold them in school.

A class from the School for the Deaf Visits AAS

rarely receive. All buddies are part of our holiday celebrations. During a Christmas show a popular song was sung by the AAS students on the stage. The children from the School for the Deaf, sitting among the audience, recognized the song and started to sign with their hands in their own language. The moment had been so beautiful and impressive that there hasn't been any dry eye left in the rest of the audience.

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Besides the visits to and from the buddies, where projects and activities are carried out together, AAS also has all school-wide projects, such as the Harvest Food Drive in October and the Christmas Angels Tree Project in December which mobilize the efforts of the entire school community to help needy places with donated food items or to enhance their Christmas holidays with gifts from our children.

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The main funding of the Program comes from Monthly Pizza Lunches or Bake Sales. The net income goes into the Community service account and helps purchase presents, food supplies and materials for class projects. This month (September 2006) the sports department offered to contribute and started the campaign "Fitness for Charity"- until today, since the activity started last week, the children have raised over 800 leva from fitness activities. In 2004-2005 Grade 4 class raised money for a new playground for the street children in the Faith Hope and Love Center. The Students advertised their project regularly in the Weekly Newspaper. They met and made personal requests for donation from corporate companies as well. At the end of the year they had BGL 30000 leva for the renovation of the playground area around the center. The disadvantaged children

The kindergarten group made a few plastic "Stotinki"-jars from big mineral water bottles, put them at the entrance hall of the school and collected coins during the entire month. Few parents also helped the cause offering cookies and cakes at a Bake Sale organized during recess time. It was outstanding that the campaign was entirely initiated and managed by the AAS students. After the tragedy in Beslan every student in AAS drew a greeting card and bought a present for a Russian child. The cards meant to express support and encourage the victims to believe in life and good will. Money, new clothes and school materials were also collected and sent to Bulgarian Red Cross. A flooded school in Gnilyane, Novi Iskar was also supported by the CSP. The AAS Middle school organized a raffle with prizes and a popcorn sale to raise funds for the renovation of the school in that almost destroyed by the floods last summer. By June 2006 children have raised 1600 leva, which was not sufficient to meet the cost of the entire repair. AAS is looking for a partner from the building or construction sector to donate the materials for the re-plastering of 4 school classrooms and the school yard fence. It's already October, and Harvest time too. The Harvest Food Drives is coming soon and AAS students will start collecting packed food for the needy places again. Is there a way you or your company could support this young people's efforts and achieve more? These young responsible citizens keep their promises. They might become your best trusted partner. Think about it, they are just a click away.http//sofia.ecis.org ■

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Indian Summer Elections Exercise in Bulgarian political weather forcasting* The most boring or the most interesting elections in Bulgaria are coming. Hundreds of thousands of citizens are sitting and watching noisily launched reality shows and television campaigns. Or going to concerts of Depeche Mode and Eros Ramazzotti. Or to the promotion of the latest hypermarket. Or, as a last resort, to a Levski-Sofia's game in the Champions League. But not to a rally, parade, election event. Bulgaria is on the threshold of the European Union (EU). Gone are the clashes of the 1990s, gone are the passions, the ideological battles. Bulgarians seem politically pacified, lost in an easy pre-European nap in the beginning of the Indian summer. If you have lived in Bulgaria for long, you must know well the following mid-summer horror: it is three o'clock in the afternoon, the sun is baking the asphalt with vengeance, lounging in the shade, can't prop your eyelids open. Just at a moment like that there comes the big storm. It is the same with Bulgarian politics: situations long asleep can suddenly awake, to everybody's horror. A savvy

journalist used to say: "What I fear most is a dull news day. It always turns upside down." I am not saying that inevitably there will be a surprise. I am not saying either that what has been will be again - that is a cliche. I am just giving a chance to human genius, fortuity or folly to disprove the forecasts that we journalists have to make on the basis of the evident, because this is what we do. And what is evident, what we know about the presidential elections on October 22, is this: 1. The straightening of voter registries now gives

a chance for victory at the first round For the first time the Bulgarian Central Electoral Commission has radically cleaned the voter registries of various phantoms. A vast number of people have not voted for long: they have either left the county or passed away.

By Boyko Vassilev But their registration until now has made it almost impossible to achieve a 50-percent voter turnout at the first round of elections, as required by the law. That has changed now. 2. Nevertheless, less and less people in Bulgaria today declare any interest whatsever in politics and more particularly in elections. 3. Therefore there are two reasons to motivate voters: "End of the status quo" and "Let's not rock the boat." The first reason is based on the fact that obviously Bulgarians do not live well and the powers should be frequently changed. The second reason again is based on the fact that Bulgarians do not live well, but rocking the boat will just bring insecurity and new risks, which is even worse than the status quo. Both reasons are deeply rooted in the political culture of Bulgaria's transition period. They are united by the powerful Bulgarian pessimism that is hard to

* Due to the production requirements of the printer of the AmCham Bulgaria Magazine, this article by Boyko Vassilev was written 3 weeks prior the presidential elections in Bulgaria 2006. The editorial staff recognizes that some of the figures and events mentioned in the article will go trough changes, but the article describes in a great way the pre-elections situation in Bulgaria. AmCham Bulgaria Magazine will publish a complete analysis of the presidential election in our next issue.

AmCham Bulgaria Magazine p a g e

October 2006

19

p o l i t i c s

Georgi Parvanov

Nedelcho Beronov

Volen Siderov

explain. They are divided by voters' individual histories. The name of the second reason is 1990. The name of the first is 2001.

Georgi Parvanov. The incumbent president has good chances to be the first to win a second term by public vote. He may be tripped up by a serious campaign blunder or by his position to the status quo. Therefore, Parvanov's opponents are trying to show him as the candidate of the status quo, the father of the triple coalition and the patron of the Movement for Rights and Freedoms (MRF). But first, as we saw above, that is not always the losing position in Bulgaria. Second, Parvanov may play a complex game by positioning himself above the status quo, outside it, or - which is the best - against another status quo (see below). Third, Parvanov may promise or delicately hint at changes in the status quo after his re-election. And fourth, he has the resource of his current position of authority, which is a clear advantage everywhere in the world.

these questions from now and preparing a strategy in case of failure (e.g. Kostov's theory that poor turnout is in itself a punishment to the incumbents). The stakes are high: besides everything else, Beronov's nomination is an attempt at solving the problem with the future of the Right.

Nedelcho Beronov. The chairman of the Constitutional Court, though nominated by Democrats for Strong Bulgaria, has become the candidate of the larger segment of the divided Bulgarian Right. He will rely on the disappointment from the triple coalition (and MRF's participation in it) and the old democratic sentiment. His opponents, however, will try to show him as the candidate of an older status quo: Ivan Kostov's government from 1997 until 2001; delicately but persistently they will hint at his venerable age and the squabbles in the Right.

Only a fresh scandal with an ethnic taste can fill the sails of his ship and rank him second, after which the Bulgarian Right will have to choose Parvanov over him willy-nilly. A horror scenario for the Right; a discomforting scenario for Parvanov; a triumph scenario for Volen Siderov himself.

Two symbolic elections for the mentality of Bulgarians, who chose tranquillity in the one case and eternal change in the other. What will they choose now? If they choose tranquillity, the incumbent president Georgi Parvanov can safely make plans for 2011. But if they choose eternal change, Parvanov has a problem.

AmCham Bulgaria Magazine

October 2006

Only a superficial observation shows that "end to the status quo" is the more common reason in Bulgaria. It is true that neither a president, nor a government has won two mandates - except for the two minor coalition partners in the current cabinet. But there are Bulgarian elections where the status quo is the winner: the majority local elections. No matter how filthy the towns are, no matter how much corruption is the talk of the town (most often discussed vaguely, and in private), no matter how angry the residents are, they always elect the same mayors - they have got used to them. In 2003 the ten biggest Bulgarian cities re-elected their mayors: status quo victories par excellence.

20

How reasonable all that is is another story. Probably Bulgarian voters are conservative in lifestyle and radical in politics and voting drifts them into one of the two feelings. Or it may be the case that everything can be explained with political situations long past. But one thing is certain: the answer to the question about the presidential election on October 22 should not be looked for in the past. So let's look for it in today's candidates.

Will a second place be a success for Beronov? And

will a third place be a failure? The politicians in the Bulgarian CenterRight are thinking about the answers to

Volen Siderov. Ataka's leader is the authentic mouthpiece of protest against the triple coalition, against the MRF, against the elite, against the government, against Parvanov, against the Americans, against the West Europeans, against the Turks… The former journalist now stakes on constant negation and constant 'ifs' and 'buts.' But as with all other protest leaders, what puts a rake in the wheel is some private story: the obscure accident on the Trakia freeway and the attempts at concealing the truth will weigh on Siderov for long.

Georgi Markov. Yet another former constitutional judge, a former legend of the democratic rallies in the early 1990s, president of Levski-Sofia soccer club. Markov relies on the old supporters of the Union of Democratic Forces who are defiant toward partisan discipline, on those who gained from restitution, on the New Time party that didn’t win anything in the parliamentary election, on the new right-wing dreamers - no matter which way you look at it, he has few people to rely on. His opponents in the Right will accuse him of splintering opposition votes; his

p o l i t i c s

Georgi Markov

Lyuben Petrov

opponents in the Left will pay him no attention. But after nine years at the Constitutional Court, driven by passion and energy, Georgi Markov wants to find a place in the new politics - where his heart seems to be: the presidential election as a long comeback.

ing parties for Simeon Saxe-CoburgGotha's SNM). It is interesting to see how many votes they will get. But a good result for Petrov would mean potential for a new Communist Party, while Velev and Beron's performance will show if nationalism in Bulgaria is just a passing fashion, a personal project or a permanent phenomenon ahead of EU entry.

Lyuben Petrov, Grigor Velev, and Petar Beron. These are the candidates who believe that they have hit the wind of change, the new niche of ideas and

the future miracles in Bulgarian politics According to Petrov that is the extreme Left; according to Velev and Beron, that is nationalism. With their nomination, Petrov will split votes from Parvanov; Velev and Beron, from Siderov; and Beron will also split votes from Beronov because of the similarity in names (that has happened in Bulgarian politics already: in 2001, 5 percent of voters mistook like-sound-

These are the players. No less interesting are the big non-players. Sofia mayor Boyko Borissov skipped the election and announced an assault on the executive power in the winter. Former president Petar Stoyanov twice refused to be the common candidate of the Right and did not get the muchdesired revenge on Parvanov, hoping he would not bear the blame for Beronov's possible failure. VMRO's leader Krassimir Karakachanov also gave up the race after seeing the crowd in the Right and on the nationalist track. All these people made wise choices. But time will be their judge.

Petar Beron

Grigor Velev

As time would have been Georgi Parvanov's judge if in 2001 he had listened to all observers and to half his party fellows and had not run in what then seemed a doomed election. But so is it in Bulgaria. It is nearly three in the afternoon. The sun is hot. The hand is holding the eyelids open, and the throat is thirsty for cold water. Is it going to rain? As Bulgarian weather forcasters and pollsters say, there is a fifty-fifty chance to get the right answer. ■

AmCham Bulgaria Magazine p a g e

October 2006

21

i n f r a s t r u c t u r e

The new bridge between Harmanli and Lubimec, one of the construction facilities to be built on Trakia freeway.

Government Promises Freeways Finished in 10 Years Bulgaria is way behind in autobahn construction, its roads are in potholes By Mina Georgieva Bulgaria's national strategy for infrastructure development drafted by the government weighs exactly 5 kilograms. The hefty document was presented recently to foreign ambassadors by Prime Minister Sergey Stanishev.

AmCham Bulgaria Magazine

October 2006

"We have to fill the vacuum that separates Bulgaria from the European standards for roads, transport and environmental preservation," he said.

22

The cabinet's strategy reads that

714 km of freeways will be built in Bulgaria by 2015 and some 90 km will be opened by this year's end. Currently, the total length of freeways in this country is 350 km. The Bourgas - Karnobat section of the Trakia freeway will be completed by the

end of September. Another 2 km of Struma with a total indicative value of 600 million Euro will be finished before the end of the year. Public-private partnership will be sought for Struma, Hemus and Cherno More; negotiations are already under way with the European Investment Bank on a possible feasibility study and review of the rules for concession. A similar partnership scheme is considered for ports and airports. These ambitions are simply unattainable, given today's realities in construction and investment in this country, especially as Bulgarian roads are concerned, economists from the non-government sector commented. It is pretty obvious that the road infrastructure is in a deplorable state, despite constant

MONEY FOR ROADS (1994-2005) (in million $) 1994 . . . . . . . . . . . . . . . . . .5 1995 . . . . . . . . . . . . . . . . .42 1996 . . . . . . . . . . . . . . . . .26 1997 . . . . . . . . . . . . . . . . .26 1998 . . . . . . . . . . . . . . . . .73 1999 . . . . . . . . . . . . . . . .158 2000 . . . . . . . . . . . . . . . .188 2001 . . . . . . . . . . . . . . . .176 2002 . . . . . . . . . . . . . . . .164 2003 . . . . . . . . . . . . . . . .201 2004 . . . . . . . . . . . . . . . .265 2005 . . . . . . . . . . . . . . . .126 repairs; money is never enough and figures speak for themselves: an average of 16 km of new freeways have been built annually for a period of more than 30 years.

i n f r a s t r u c t u r e

Freeways in Bulgaria make up just 1.7 percent of the republican road network (331 km) - a shameful record for a prospective EU member. The statistics for the past 15 years is even more illustrative. Since 1991 no more than 54 km have been built. That runs counter to Bulgaria's claim to be a key logistic center not only in the Balkans but also in Southeastern Europe. Croatia, which we readily cite as a laggard in the EU accession talks, has built and put into operation more than 500 km of autobahns for the past two years. That means that given the current speed,

Sofia Under Construction

Bulgaria will need 50 years to catch up with Croatia. Bulgaria is one of the few European states that has no completed freeways stretching from border to border. There is only one bridge at the 500-kilometerlong border with Romania along the Danube river, experts recall. The two unfinished freeways inherited from communist times are a total of 345 km long. Their construction was only resumed in the past few years. The residents of the capital city still travel up to eight hours to cover the 450 km distance to the seaside. Some of the national roads have been rehabilitated with funds under the Phare program but traffic there is slow because they pass through towns and villages. The rest of the roads are riddled with potholes and many accidents occur because of that. About 60 percent of the road network needs

urgent rehabilitation

The companies making the repairs offer a 10-year warranty on the new pavement. According to their contracts with the municipality, if any section gives way while under warranty, the company will repair the damage at its own expense. The rehabilitation of streets in Sofia may continue with repavement of district alleys - district mayors have insisted on that for long. For the purpose Sofia can use the 2.5 million Leva it recently received as dividend from Municipal Bank. The municipality's 2007 draft budget envisages only 11 million Leva for street repairs - the same amount as initially budgeted for 2006.

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23 "We will hardly be able to take out a loan for re-asphalting next year, because we are starting the construction of a waste treatment plant. Even if the project is funded with EU money, we will have to provide 20 to 25 percent of the amount as co-financing," said deputy mayor Minko Gerdjikov. Funds will also have to be allocated for other projects under the EU cohesion and structural funds. Gerdjikov expressed hope that the municipality will apply with projects for street rehabilitation as well.

October 2006

The railway network needs 1.2 billion leva, according to government assessments. Finance minister Plamen Oresharski explained that half of the amount would come from European funds.

A second wave of repairs, which includes another four streets, will start in late September and finish in early November. Repairs will be made on 202 Street and boulevards Nikola Vaptzarov, Yanko Sakazov and Shipchenski Prohod. The plans envisaged repavement of Yanko Sakazov Street, part of Vasil Levski Boulevard, and Fritjof Nansen Street, but municipal authorities decided that the streets did not need urgent repair. Instead, they included a section of 202 Street (between the Nadezhda overpass and the Central Cemetery), which is in very poor condition.

AmCham Bulgaria Magazine

Some 3.3 billion Euro is needed for the construction of 714 km of freeways until 2015 and an additional 5.7 billion Euro for repair and refurbishment of the other roads. Priority projects include the freeways of Trakia (Sofia - Bourgas), Maritsa (Orizovo - Kapitan Andreevo), Struma (Sofia - Kulata), and Cherno More (Bourgas - Varna).

Sofia municipality has been carrying out large-scale construction projects, which included repaving 11 main boulevards in the capital city from August 12 until September 20. The basic repairs of boulevards, for which the municipality borrowed 20 million Leva from HVB Bank Biochim, were finished as planned. The renovation of General Skobelev, Knyaginya Maria Louisa, Peyo Yavorov, Alexander Stamboliyski, and Ivan Evstatiev Geshov started on August 12.

i n f r a s t r u c t u r e

Priority Freeways 1. Trakia (Sofia - Bourgas): on a concession basis. The deal, which was closed by the previous cabinet, remains shelved, awaiting the ruling of the court. Apart from that, an independent financial audit will establish whether the terms of the concession are beneficial for Bulgaria. The government will grant a concession on the freeway, no matter whether Magistrala Trakia or another company will operate it. 2. Maritsa (Orizovo - Kapitan Andreevo): one of the ideas discussed is to set up a special state investment company to finish the construction and operate the freeway. That could attract financial resource from the budget and from banks. The freeway lies on a strategic European route. It generates traffic to Trakia and is extremely busy. 3. Struma (Sofia - Kulata): on a concession basis. A short but relatively expensive freeway. An option will be sought to offer good terms to the future operator. Interest is expected to be manifested by companies operating freeways in neighboring countries. It is intended to generate additional traffic, which will make it economically efficient. The government's infrastructure strategy allocates 5.2 billion Euro for the implementation of infrastructure projects by the public-private sector in the period 2006-2009, including 4 billion Euro for transport and 1.150 billion Euro for environment. Another 50 million Euro is envisaged for the energy sector, and some 12 million Euro for veterinary medicine and irrigation systems.

AmCham Bulgaria Magazine

October 2006

The government has also calculated the investments needed over a longer-term period. A touch above 8 billion Euro is envisaged for infrastructure projects between 2007 and 2015, including 6 billion Euro for transport, 2.4 billion Euro for environment, and 3.3 billion Euro for veterinary medicine and irrigation systems. Some 5.3 billion Euro is planned for projects in the real sector until 2009 and about 72. billion Euro for the period 2007-2015.

24

To carry out infrastructure projects under the National Strategy for Integrated Infrastructure Development Bulgaria will rely on budget funds and on the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD), the World Bank (WB), and the Council of Europe Development Bank (CEB). Cooperation will be also sought through public-private partnership, said Plamen Oresharski. The finance ministry expects that

Bulgaria will receive some 500 million Euro from the EIB in each of the next three years in support of EU fund absorption. After 2009 funding from the bank will reach 700 million Euro. In some years Bulgaria will rely on financing worth up to 150 million Euro from the EBRD. The same annual amount is expected in the next three years from the WB, Oresharski explained. Bulgaria can receive between 50 and 70 million Euro a year from CEB for social projects.

cial resources provided for roads by the republican budget, the European structural funds and other international donors. It will also collect the proceeds from toll stickers. The management board of the fund will be chaired by the minister of finance. The transportation minister will determine the policy and priorities concerning roads and prepare projects for freeways, first-class roads and some secondclass roads. The projects for repair and construction of municipal roads will be prepared jointly by the ministries of transport and regional development and the mayors of the respective regions. The fund is attached to the finance ministry in order to balance the interests of the three ministries that will manage the European funds for roads under different operative programs, said a government source acquainted with the restructuring talks. From 2007 until 2013 Bulgaria will receive funding for roads under the Regional Development operative program, which is managed by the ministry of regional development and public works (350 million Euro); the Transport program, managed by the ministry of transport (900 million Euro); and the plan for agriculture, managed by the ministry of agriculture (500 million Euro). These three ministries will organize the

The government hopes to attract up to 2 billion Euro through public-private partnership in freeway construction and between 130 and 140 million Euro for ports and airports.

tenders for awarding contracts on road projects financed by the European funds.

On an institutional level, a

council of three ministers will take all major decisions concerning roads in Bulgaria: which roads will be repaired, which projects need more funds to be channeled to, if and where new freeways will be built. The trio will comprise the ministers of finance, transport, and regional development and public works. They will manage the recently established Republican Road Infrastructure Fund, which will replace the Roads Agency at the ministry of regional development. The fund's rules of procedure were approved by the government on August 31. The fund will receive all the finan-

The government is already working on the next stage of the National Strategy for Integrated Infrastructure Development, which will include the social infrastructure as well. A priority project in the energy sector is the Belene nuclear power plant, the cabinet's infrastructure strategy reads. Bulgaria must be independent in respect to energy, the prime minister said. He underscored that this country would fulfill its commitment to the EU concerning the closure of units 3 and 4 of the Kozloduy nuclear power plant. The installation of household gas utilities, which is still lagging behind, is also a priority of the cabinet. ■

a n a l y s i s

Economic Growth Accelerates The economic growth accelerated to real 6.6% y/y in Q2 and 6.1% y/y in H1 relative to 5.6% in Q1, according to preliminary data of the national statistical institute. The pace of expansion in Q2 is the fastest since the first quarter of 1998 but it is to a large extent a consequence of lagged positive effects from privatisation and investment developments in the past several years. The GDP figures were fully consistent with the earlier announced strong performance in the industrial and export sectors. The same real sector indicators point to a certain slowdown in Q3, which is the biggest of the four quarters of the calendar year, but signs of rebounds in the agricultural and tourist sectors are likely to keep the growth pace above 5%. In all cases, the GDP figures for H1 will keep the full-year growth above the government projection of 5.5%. As far as FDI inflows continued to accelerate this year and bank credits remain on a solid rise, GDP growth rates in the range of 5.5% to 6.5% should be considered sustainable in medium terms. It is even possible to see slightly steeper hikes for a short period of time in case of successfully utilised EU funds in the ailing agricultural sector and transport infrastructure.

2001

2002

2003

2004

2005

Q1/06 Q2/06 H1/06

Agriculture

0.3

5.5

-1.0

3.0

-8.6

-2.7

-1.1

-1.7

Industry

4.1

4.6

6.8

5.8

7.3

8.8

9.0

8.9

Services

4.7

5.1

4.0

5.7

6.6

6.0

4.7

5.3

4.1

4.9

4.5

5.7

5.5

5.6

6.6

6.1

4.4

3.6

6.6

5.1

6.8

4.8

6.7

5.8

Investment

23.3

8.5

13.9

13.5

19.0

21.4

20.3

20.8

Exports

10.0

7.0

8.0

13.0

7.2

12.9

10.2

11.4

Imports

14.8

4.9

15.3

14.1

19.6

20.0

11.4

15.3

GDP Consumption

Source: Statistical Institute, preliminary data for 2005, 2006 GDP in constant prices (%, y/y)

tourist visits reported for July and anecdotic evidences for August and September set better expectations for Q3.

The GDP pace of expansion matched the average for the 10 new member states in Q2 and remained significantly above the benchmarks for the eurozone and the old member states. Nevertheless, the economic performance is not that impressive when compared with the best performing members from the Baltic region. And the country certainly needs a more impressive pace in order to catch up with the average income levels in EU as Eurostat data for last year place Bulgaria at 32% of the EU-25 per capita GDP in purchasing power standards which is in fact the lowest level among all EU members. The other acceding country Romania is ranked slightly higher at 35%. Bulgaria is thus outperforming only the EU candidates Turkey and Macedonia, which stand at 31% and 26% of the EU average respectively. On the other hand, the country's growth path since mid-1997 is quite stable unlike short-term volatilities observed in most of the new EU members and applicant countries in Southeast Europe. ■

This article is based on extracts from ISI Emerging Markets IntelliNews publications: Bulgaria This Week and Bulgaria Country Report. For more detailed information please contact ISI Emerging Markets office in Sofia at +359 2 8160404 or [email protected]

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October 2006

The economic breakdown by demand components unveiled a strong rebound in aggregate consumption paced by a 7.4% increase in private spending in Q2 and 6.4% y/y in H1. The rates are above the earlier reported household statistics but well below retail sale and consumer credit growth. Investments expanded by 20.3% y/y in Q2 and 20.8% in H1 in terms of net accumulation of fixed assets but without account of inventories. On the external side, imports grew slightly faster than exports to confirm our observations that a large share of

the merchandise export gains seen in the balance of payments for Q2 were driven by price effects.

AmCham Bulgaria Magazine

On the supply side of the economy, the industry expectedly surged by 9% y/y in Q2 to mark a slight acceleration from 8.8% in Q1. The agricultural value added remained on the downside but other related indicators shaped up favourable expectations for Q3, including one-off gains from base effects due to flood damages that hit large farm areas in the same period last year. The growth rate in the service sector slowed to 4.7% y/y in Q2 from 6% y/y in Q1 but foreign

GDP breakdowns in constant prices (%, y/y)

i n t e r v i e w

MP: Reforms Are Stalled Privatization is halted; the government has little will to restructure the fiscal system, healthcare, welfare and education, says UtDFs Martin Dimitrov, deputy chairman of the parliamentary budget and finance committee - Mr. Dimitrov, how do you assess the policy of Sergey Stanishev's cabinet in the field of finance and economy during the first year of the coalition government? - When the coalition was formed it made a very important promise, i.e. that the redistribution of gross domestic product (GDP) through the budget will not exceed 40 percent. But in the beginning of 2006 the share suddenly jumped to 41 percent. Though the difference may seem small, that means hundreds of millions of leva that will be taken from the Bulgarian citizens. Another important thing: there were five or six areas in which fundamental reforms had to be carried out, i.e. welfare, healthcare and education. But there is not even a hint of reform. We can safely say that there is not a single important area in which reforms have been started.

AmCham Bulgaria Magazine

October 2006

That is the big problem of the government, which affects economic growth and will become more sensible next year. There is a big risk for budget revenues in 2007, because the external borders in relation to the EU will cease to exist and the principles of revenue collection will change. There are serious problems with the National Revenue Agency (NRA) this year and, if not settled, they may turn into a time bomb.

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In the past one year privatization was practically halted. We can hardly be happy with the progress made in economic liberalization. State-owned enterprises like railway carrier BDZ, the National Electric Company and heating utility company Toplofikatsiya remain inefficient and continue incurring losses. The fact that inefficiency breeds malfeasance is proven by the scandals about Toplofikatsiya - Sofia. - It has been suggested recently that the next fiscal year will be tough due

Martin Dimitrov was born on April 13, 1977. He has a master's degree in international economic relations from the University of National and World Economy. He has worked on international projects at the Institute for Market Economics in partnership with the European Union, the International Monetary Fund, the U.S. Agency for International Development. Currently he is member of parliament from the United Democratic Forces (UtDF). He is deputy chairman of the parliamentary budget and finance committee, and observer at the European Parliament since August 26, 2005.

i n t e r v i e w

to Bulgaria's contribution to the EU budget. Can this be used as an argument for freezing tax rates in this country?

and move out of the gray economy. The corporate tax abatement in recent years has inevitably resulted in higher budget revenues.

- Bulgaria will pay 1.24 percent of GDP to the Community's budget, or about 620 million Leva. If certain conditions are in place, some 1.5 billion Euro of the amount, or 3 billion Leva, can return to Bulgaria. That depends mainly on two things: administrative capacity and quality control. The problems with capacity are well known; nevertheless the government is conducting a policy that would take five years to solve them. The situation with control seems even worse.

- Bulgaria is one of the countries featuring the lowest profit tax rate in Europe, 15 percent. How a further reduction in the tax can attract foreign investment and, respectively, ensure economic growth?

In reply to my inquiry during the parliamentary hearings, the prime minister said that Bulgaria would absorb not more than 20 percent of the European funds. Hundreds of millions of euro will not come to Bulgaria, because the triple coalition has not done its job.

- What concrete proposals for taxation changes is the UtDF going to file?

- Do you think that there are reasons for the government to keep on fulfilling the requirements of the International Monetary Fund (IMF) concerning the budget policy and especially the imperatives for a budget surplus in 2007?

- Which taxes can be revised next year and how much?

- What is the reason behind the idea of reducing social security contributions, given the fact that that will further widen the deficit in state social security? - Last year the Union of Democratic Forces insisted on cutting the social security burden by 12 percentage points. In the end the installments were reduced by 6 percentage points. The Bulgarian Socialist Party predicted a collapse of the pension system, but it is clear today that the lower rates have improved collection. - Can it be said that the management of public finance has become more transparent? - Unfortunately, we cannot yet speak of transparency of public finance. Program budgeting is just pro forma and the budgets of the separate ministries are still determined on the basis of the expenditure for the preceding year. Such an approach guar-

- The curbing of lending was a mistake, because it forced many market agents to seek direct financing from abroad and thus avoid the existing restrictions. - Will Bulgarians be poorer on average in 2007? - Given an inflation rate of 4 to 5 percent on an annual basis - yes, they will. The government has no intentions whatsoever to do anything and accelerate economic growth, which would put more money in people's pockets. Instead, it is increasing the tax burden and not making reforms. The bad news is that next year people will become poorer. Or in the best-case scenario, they will not be able to emerge from poverty and the status quo will be preserved. - The government grounds most of its measures on the fact that the current account deficit has to be narrowed. Do you think that is going to happen? - The current account deficit will start decreasing when Bulgaria's economy becomes competitive and exports begin to increase. That requires a good business environment but no measures are taken in this direction. There is no tax abatement, no improvement in the work of the administration, no electronic government etc. Businesses are pessimistic about their development and that is the actual estimation of the government's performance. As concerns finance, it is obvious that the 2007 budget will provide for a big surplus. That may have been agreed with the IMF but the public has not been informed, which is inadmissible. The government cannot collect taxpayers' money and not account for it. The situation is just like what has happened this year: more and more money is taken out of people's pockets, but secretly. ■

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- The huge surplus allows cutting the corporate tax rate (from 15 to 10 percent) and introducing a zero tax on reinvested profit, reducing the social security burden (by 6 percentage points) and the income tax. Unfortunately, the triple coalition has no will for such a policy. The incumbents still cannot understand that low rates encourage people to pay their taxes

- UtDF's proposals will be similar to what I replied to the previous question. To build a competitive economy the state has to provide more freedom and opportunities to economic agents. It is competitiveness that is at the basis of boosting exports and solving the problem with the current account deficit. A functioning market economy is a precondition for high wages and real welfare policy.

- How do you assess the stability of the banking system in Bulgaria, the credit expansion of financial institutions and the measures proposed by the IMF to rein in lending?

AmCham Bulgaria Magazine

- The government liked complaining that it could not carry out its social program because of the IMF. Later the same government decided to extend the agreement with the fund for another six months. For the past few years the IMF has helped Bulgaria achieve financial stability. It is another question that Bulgaria should put an end to the practice of maintaining enormous budget surpluses, which are the result of purposeful underestimation of revenues.

- About 80 percent of the investment growth in Bulgaria is due to real estate. That means that investment in production remains insufficient to guarantee high economic growth. Therefore the corporate tax reduction is crucial.

antees inefficiency and ballooning spending.

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Paul Dyck: More European Union Means More United States U.S. trade turnover with Europe is $1.8 billion per day

Sixty AmCham members, guest companies, and media representatives, were presented at the event.

"I am very excited to be in Bulgaria at the time when you are at the European doorstep," said Paul Dyck, deputy assistant secretary at the U.S. Department of Commerce, at the beginning of his address to the guests at the AmCham business luncheon Sep. 29.

AmCham Bulgaria Magazine

October 2006

Around 60 AmCham members, guest companies, and media representatives attended the event. Atanas Paparizov, chairman of the Parliamentary Committee on EU Integration, was among the guests. Prior to the lunch, Paul Dyck participated in a media discussion with representatives from Reuters, Dnevnik, Capital, Europe TV, Sega Daily.

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Dyck congratulated the Bulgarian government with the progress made in its reforms and said the purpose of his trip was to talk about extending the U.S. - Bulgarian commercial relationships. "We already have to discuss new exciting opportunities in regard with the Bulgaria's EU accession, because our bilateral relationships could be better," Dyck said. Better relationships would affect both American and Bulgarian governments, and the businesses, he added. U.S. trade turnover with Europe is $1.8 billion per day, with

more than $2 trillion in total foreign direct investments and transatlantic partnership creating 14 million jobs on both sides of the Atlantic, Dyck said. He added that U.S. trade with Europe is much larger than with China, India and Canada, pointing that the total of all U.S. exports to Europe has been flat since late 1990s. "It is important for us to develop strategies so E.U.-U.S. relationship remains dominant," Dyck stressed. The guest quoted the Bulgarian ambassador in Washington, Elena Poptodorova, who said, "More EU does not mean less U.S., but more EU, means more U.S." "That is the message I would like to deliver here as well," Paul Dyck said in front of the guests. He would like to know more about the obstacles businesses face in Bulgaria, so that both governments can be effective in developing better business strategies. In 2005 U.S. exports to Bulgaria stood at 700 million Leva and the Bulgarian exports to the United States was 560 million Leva. Many U.S. companies are interested in investments here in the energy and infrastructure sectors, Dyck said. He reminded that Bulgarian GDP in the first quarer of 2006 is 5.6 percent, unemployment is below 10 percent, which by American

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standards is not low, but in the Bulgarian case it is a progress. Trade relationships between the United States and Bulgaria would not change much after 2007, Dyck said. After Bulgaria becomes an EU member, the agreements would be standardized in a way that was applied to the new EU member states in 2004. The new agreements were discussed at the meetings Dyck had in Brussels last week. Among issues discussed in Bulgaria he mentioned corruption, intellectual property rights, keeping a fair and predictable regulatory environment and improving the judicial system. "What we would like to do is to develop specific areas of our concerns. For example for the IPR, we have these concerns in Asia, Europe, but the protection of intellectual property directly affects the investments," Dyck said in conclusion. ■

Paul B. Dyck, Deputy Assistant Secretary for Europe, International Trade Administration U.S. Department of Commerce

Paul Dyck meets Tanya Kosseva-Boshova, Landmark Properties Bulgaria and Georgi Randelov, IBM Bulgaria.

Paul B. Dyck was appointed to serve as Deputy Assistant Secretary for Europe at the U.S. Department of Commerce by President George W. Bush in June 2006. He is responsible for directing the department's efforts to open markets and ensure fair treatment for American exporters in 50 countries, including all of Europe, Russia, and Eurasia. He is also responsible for development strategies and programs to enhance U.S. commercial position in the region and engaging with foreign government officials to resolve commercial disputes.

James J. Werner (left), Regional Mgr - Europe, International Business Development Integrated Defense Systems at Boeing Company meets Vesselin Valchev, Counselor of Minister of Foreign Affairs.

Dyck received a master's degree from the University of London and a bachelor's degree from Austin College in Sherman, Texas.

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Prior to moving to Washington, Dyck worked on thenGovernor Bush's 2000 presidential campaign in Austin, Texas. From 1998 to 2000, he worked for the Texas Workforce Commission , focusing on federal budgetary and legislative issues relating to state workforce development. From 1996 to 1998, Dyck served in several capacities for the House of Representatives, including legislative director for State Representative Jim Keffer.

AmCham Bulgaria Magazine

Before joining the Department of Commerce, Dyck served at the U.S. Department of State as senior advisor to Secretary of State Condoleezza Rice. In this position he helped coordinate the Secretary's strategic planning efforts and transformational diplomacy agenda. From 2001 to 2005, Dyck served in the White House Office of Political Affairs under President Bush. As associate White House political director, he was responsible for managing the president's domestic political and policy priorities for the southern states.

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From left: David Hampson, AmCham Vise President and Manager of Grenviille Bulgaria, Marc Lumer, Contracting Executive, US Army Space&Missile Defense Command and Alexander Karagiannis, Deputy Chief US Mission to Bulgaria, welcomed the businesses with new exciting opportunities arising from the US Bulgaria training facilities.

U.S. Experts Teach Bulgarian Companies Nuts and Bolts of Government Contracts

AmCham Bulgaria Magazine

October 2006

By Irina Bacheva

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With over 50 participating companies in Yambol and 160 companies in Sofia, the training seminars on U.S. contracting procedures turned out to be the ideal venue for business opportunities in Bulgaria created by the establishment of U.S. - Bulgaria training facilities. The training was organized by the U.S. Defense Acquisition University, American Chamber of Commerce in Bulgaria and U.S. Commercial Service in Sofia. Public contracts worth tens of millions of dollars are expected to be awarded in the next couple of years. Several Bulgarian companies have already obtained registration. Eighteen Bulgarian and foreign companies won contracts for 1.5 million

Leva during the joint military exercise of Bulgaria, United States and Romania in July 2006 in Novo Selo. Every year the U.S. government is buying products and services for $400 billion, approximately $250 billion of it for the U.S. military. Once they know the procedures, Bulgarian companies could apply together with other companies for those $250 billion. The seminars in Yambol and in Sofia were a follow up of the AmCham conference on June 27-27. During the training in September the companies presented in Yambol and in Sofia received a practical guidance of how to register in the Central Contractor

Registration (www.ccr.gov) to be able to participate in the ongoing tenders not only for opportunities in Bulgaria but also in Iraq, Turkey and for the needs of the U.S. military throughout the world. The U.S. team of experts was headed by Mark Lumer, contracting executive with U.S. Army Space and Missile Defense Command. Among other guests were: Marcia Coleman, lead contracting officer, Wiesbaden Contracting Center; Bruno Wengrowski, professor of Contract Management at Defense Acquisition University-South Campus in Huntsville, Ala.; and David Lewis, of Defense Acquisition University, Midwest Region. Alexander Karagiannis, deputy chief of

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About 160 companies have registered to participate for the training in Sofia

the U.S. mission to Bulgaria, welcomed the companies and guests at the seminar. He stressed that Bulgaria is a strong partner of the United States and after the completion of the U.S.Bulgarian Defense Agreement, good opportunities for local companies have been created. Joint facilities, for instance, would be good for both countries, as far as they will generate strong economic activities.

dures are free of charge.

The potential candidates could act as prime contractor, partner, sub-contractor or supplier. Concerning business opportunities in U.S.-Bulgarian training facilities, the tutors mentioned as most needed the hotel services, water and

AmCham Bulgaria Magazine

Tutors presented a detailed picture of the U.S. contracting system, which is very structured and predictable, but the candidates should be very careful of the deadlines and tender conditions. According to Wengrowski, the process is mechanical, not political, and the federal acquisition system aims at satisfying the customer in terms of cost, quality, and timeliness of the delivered

product or service. The U.S. contracting procedures are very complex and are based on 700 U.S. laws. Tender rules are clear and accessible mainly electronically, Wengrowski said.

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Marcia Colman, Lead Contracting Officer, US Army and Rumen Gardev, Deputy Mayor of Yambol at the seminar.

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The U.S. contracting procedures are transparent and candidates are treated equally regardless of their nationality, Bruno Wengrowski of the Defense Acquisition University explained. The only condition for a company to be admitted to a tender is to obtain the so-called DUNS number and CAGE code and register at the US Central Contractor Registration. The proce-

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food supply, engineering and construction services, transport, mobile telecommunications, office consumables, fuel, electricity supply, portable toilets and showers, laundry and dry cleaning, medical services, custom services. In addition, U.S. military will enjoy the recreation and leisure time in the surroundings of the facilities, which in fact would be extra investments in the local economy. The criteria for evaluation of company offers are specified in advance in the tender announcement, Mark Lumer explained. The companies have to follow strictly the rules of the respective tender, doing neither more, nor less. It is almost impossible to abuse the federal tender rules and if this happens, the "candidates" are disqualified and put in a list with no right to participate in tenders for three consecutive years. In worst cases those individuals and companies are treated as criminals and put in jail, Lumer said. Past performance of the candidates is also of great importance for successful funding. The companies should submit written evidence of skills, for example, acknowledgment letters of partners and names f previous contractors. "If a company does not have past performance, it is evaluated "zero". It is not harmful for the overall performance but is not beneficial as well," Bruno Wengrowski said. The candidates that do not succeed in a tender receive feedback information with guiding points and recommendations on how to do better in the next tender. Depending on the tender, the whole process of applying and receiving of financing may take from one week to one month.

AmCham Bulgaria Magazine

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A successful candidate from Kotel who had won a tender for water delivery for one of the military exercises in Novo Selo shared his personal experience. By winning a contract, he got good references and now he would be able to participate in missions and tenders of U.S. Army all over the world. The businessman participated as a subcontractor of a U.S. company. The quality of the water was tested in Germany because it had to meet certain standards.

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According to the visiting U.S. experts, once the companies get DUNS and CCR Registration, they apply for the NATO Cage code (NCage), which classifies a company in the NATO codification catalogue. Bulgarian expert Kalina Damianova of the Ministry of Defense said that over 70 Bulgarian companies have already obtained NCage code in order to enlarge their activities and businesses. After applying, within 90 days a company receives NCage code, which in emergency cases could be received within two days, Damianova added. ■

Mark Lumer is the Principal Assistant Responsible for Contracting for the US Army Space and Missile Defense Command with offices in Washington, DC, Huntsville. As the Director of Contracts, he oversees over 12 billion USD in active contracts, annual expenditures of about 2 billion USD and a staff of approximately 85. Mr. Lumer is a member of the Senior Executive Service and the Army Acquisition Corps with Level III certifications in both Contracting and Program Management. He is nationally known expert and author in the field of government contracting and has received many awards. He is listed in several editions of Who's Who, including the 1995 and 1996 editions of Who's Who in the World, and the Army has awarded him the Meritorous Civilian Service medal, the Superior Civilian Service medal, and the Commander's Award for Civilian Service twice.

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Millions for the Taking Fixed-price government contracts are rewarding risk with higher profit, says Mark Lumer, Contracting Executive, U.S. Army Space and Missile Defense Command - Now that you have been teaching Bulgarian companies, how do you appreciate their skills in participating successfully in tenders? - The Bulgarian companies have already started participating in tenders with the recent joint military exercises in Bulgaria, and 26 companies were awarded contracts, one of the firms from Yambol. The companies awarded with contracts have all performed superbly. We have been very impressed with the quality and the scope your companies have produced. These contracts are connected with the military exercises, and now what we are doing during the seminar, is to download tenders for Bulgarian companies to look at, and they can start competing right now if they have DUNS numbers and CCR. The result of this seminar is that your companies would be registered and fully eligible and they will have the tools and the capability to look at any U.S. government procurement around the world, so they can compete for anything. - How many companies do you expect to participate from Bulgaria?

- Year 2007 would be very busy for the interested Bulgarian companies, right?

- I do not know. It depends on the contracts with suppliers. Within the next seven to twelve months we expect to see tenders being announced for future work. The tenders would be out there next year to set up the infrastructure. - What suppliers you would need most? - It is really anything across the board: suppliers, vendors, construction works, water and food deliveries, all sorts of services. - How do you see the benefits for Bulgarian economy? - The U.S. government buys about $400 billion in goods and services every year. After the registrations, the Bulgarian companies would be ready to compete on equal foot with any other company in the world. - If the documents are very well prepared, and a company wins the tender, what is the profit? - Generally speaking we have two sorts of contracts: One is "fixed price" contract where we pay a certain amount. That is the most of the contracts we use. If a Bulgarian company says the project will cost a million dollars, we agree that this is a good price, and we would pay a million dollars. If the Bulgarian company becomes very efficient, and they spend only $900,000 dollars, they keep the extra $100,000. If they are efficient and perform well, there are tremendous opportunities to make

- How much time does it take to fill out the documents and receive the needed numbers? - The process can be time consuming, it really depends on what you are buying and how much we are buying. If it is water, it may take a couple of hours, but if you build a base that would be more complex and could take several weeks to fill out all the documentation together. That is why we tell the companies it is critical to read the tender rules. For example, we need 3,000 liters of water. That could be very fast putting the documents in, and it may take one hour. We do have major procurements, major tenders, where it takes companies months to put a proposal. Generally speaking we pay in 30 days. We are having an electronic payment, sending the money on the wired transfer, there is no physical mailing of the check. - Does the company need to invest the initial sum beforehand? - The company has to have an ongoing business. If it is brand new one, then we will ask questions of its financial capability. We do not require companies to have a lot of money in the bank, if they have a performance track record. We also have advance payments, which are unusual, but in this case the company says, I can do this work and I need the money upfront. ■

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- I believe yes, even some of companies starting immediately, so within the next year we would see contracts awarded to Bulgarian companies. In regard with the bases coming, I believe there would be millions of dollars available. These tenders are not only for Bulgaria, but all across the border. There is a lot of money avail-

- When do you expect the infrastructure of the U.S. training facilities here to be completed?

profits. There are also "cost type" contracts which are reimbursed with the cost of the project. And that is generally 10 percent or less of the contract, of the invested capital. If the cost to perform is $500,000, we would typically pay an additional fee of $50,000 or less. Most opportunities are in the fixed price contract, because there we recognize the contractor a larger sharer of the risk.

AmCham Bulgaria Magazine

- We anticipate a hundred Bulgarian companies to register and be fully eligible. Then they have to work hard to get a contract.

able in Iraq, with the same procurement rules applied.

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K Street Comes to Sofia Lobbying through open communication is normal, secretive meetings are not, says Diana Pazaitova, managing director, and Kirko Kirkov, founding partner of CEC Government Relations - Bulgaria By Irina Bacheva - CEC Government Relations is delivering lobbying and strategic communications campaigns in Central Europe, and now through its office in Sofia. Is lobbying in Bulgaria different compared with the other East European countries? Are there public misunderstandings in Bulgaria in this regard? - Lobbying is really no more than effective communication with political decision makers, on the basis of analysis and intelligence of whom to lobby in the first place. More information for decision makers leads to improvements in the overall legislative and regulatory framework. So it's an education process - that of the decision makers and public at large. In most emerging economies - as this is not unique to Bulgaria - communication channels to senior government and industry decision makers are often blocked or regulated by "gatekeepers" who distort the communication process and in some cases resort to unethical means of regulating access. What we are trying to do with CEC in Bulgaria is to be a symbol of professional and transparent lobbying, understood as effective communication of issues, policies and strategies. - The services you provide are quite unique for the Bulgarian society. How do you appreciate the atmosphere here, on the one hand from governmental side, and on the other hand, from your clients? What are the challenges?

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- Government relations and the lobbying of key issues is an integral part of the democratic process everywhere. As I said, it is essentially the effective formulation of a problem and its recommended resolution, and the identification of key stakeholders who can contribute to the resolution. Lobbyists improve communication between those who decide and those their decisions affect, and act in the name of interest groups who might not otherwise be heard, complementing the work of expert teams. The final decision, however, is always up to the politicians.

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Effective communication, honesty and integrity in the formulation of the problem and its proposed resolution, consistency and resilience, effective networking and a passion for "doing the right thing" are the key elements of effective lobbying. For this reason, we will not accept work that does not meet this model of activity. The main challenge in Bulgaria is linked to expectations and past practices, and there is a need to educate local stakeholders that there is such a thing as professional and ethical lobbying. It is to be still appreciated in Bulgaria that professional lobbying has an entirely legitimate and positive role to play in any democratic system. We are firmly resolved to be a part of that standard-setting in our country.

Kirko Kirkov, founding partner and Diana Pazaitova, managing director of CEC Government Relations - Bulgaria

We believe we are part of that adaptation process, as the CEC Bulgaria team consists of Bulgarian nationals who are already held in high regard within both the public and private sectors. They are experienced communicators who have been "tested and tried" before being invited to join a company that has already built its reputation in other Central European markets. Our clients are primarily big international companies and now an increasing amount of business is being brought via pan-European lobbying campaigns on behalf of individual companies or industrial associations who feel they want to conduct a campaign on an issue. We are hoping to see more Bulgarian companies coming to us appreciating the real benefits that a professional lobbying agency can bring to the economic and political environment they operate in. A piece of news concerning our company is that we recently decided to form a strategic relationship with BursonMarsteller, one of the most respected global public affairs agencies, to become their exclusive public affairs partners in Central Europe. Working together with Burson will enable us to capture the growing pan-European lobbying market I mentioned earlier. - Is the current blueprint of the Lobbying Act satisfying your needs to develop your campaigns? - The blueprint for the proposed lobbying act is a necessary effort by the Bulgarian political class to regulate itself and the lobbying activity surrounding it. The law attempts to bring transparency to the existing "informal" lobbying processes

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and the individuals and companies involved in it. By itself, this is a positive initiative, however much attention needs to be paid as to the specific requirements and mechanisms set forth in the act such that these not be used to benefit specific stakeholders only. If lobbying is a natural, legitimate and inseparable part of a democratic system, it is wrong to restrict it as if it were a negative phenomenon. Professional lobbyists could actually profit from regulation by getting easier access to decision-making authorities. If, however, professional lobbyists are to make publicly available data about themselves and be as transparent as possible, their subject of work, i.e. contact with politicians, then it will actually be more difficult to openly lobby than it is now. That is because officials will then in fact be reluctant to meet lobbyists openly, because they could be accused of being influenced. Instead, secretive meetings will become normal. This would go against the logic of such a law and in fact would encourage a return to covert lobbying. Any influencing of the decision-making process with the purpose of achieving an aim is lobbying, regardless of whether it is performed by a citizen communicating with an MP, an official communicating with a politician, or even two politicians communicating with one another. The lobbying of a natural person/voter is not prohibited or regulated in any manner. How will we make the distinction whether lobbying for the same issue is performed by somebody as an employee of a lobbying agency, as a director general of a large corporation, or as a natural person/voter? This would also lead to a strengthening of non-transparent links, pushing out professional lobbyists. - Talking about EU accession, do you think the Bulgarian companies can prepare themselves for compliance with EU directives on environmental regulations, concerning pollution and recycling of waste, for example?

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It is our assessment that there has been a growing awareness among most large companies and SME's affected by directives, such as those governing environmental matters, as to their implications. The real concerns are, first, the capacity of the Bulgarian government and its associated regulatory institutions to participate and "equitably control" the implementation of the directives within their proper spirit; second, the cost of implementation to Bulgarian companies. In many cases, this implies retooling with technology, which may not be economically justified within the context of the Bulgarian marketplace. Most companies would have preferred longer transition periods, though it is unclear whether that would have really benefited industry as it is often common practice to wait to the last possible minute before doing one's homework. ■

AmCham Bulgaria Magazine

- Right now in Europe a very important area of activity in terms of directives is energy and environment - these are the areas where there is a lot of transposition, which basically means taking EU directives and transposing them to the local legislative environment. So if you just take the issue of environment you will find that there is a whole range of industries that are affected by that: potential polluters, transport companies, insurance firms, car producers, etc.

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Visa Presents Government Services

Catalin Cretu, VP for Romania and Bulgaria, Visa International Central Europe, Middle East and Africa (CEMEA) region Catalin Cretu joined Visa CEMEA in July 2004 as area manager for Romania and Bulgaria and was appointed regional manager for Romania and Bulgaria in May 2005, heading the newly opened Visa office in Bucharest. Due to the growing activities of Visa International in these two countries, Cretu now currently holds the position of vice president for Bulgaria and Romania. Visa products, ranging from government services to credit cards, were presented on Sep. 19 by Catalin Cretu, VP for Bulgaria and Romania of Visa International CEMEA, at an AmCham Bulgaria Business after Hours cocktail. Approximately 100 AmCham member companies and guests attended the presentation at the Hilton.

AmCham Bulgaria Magazine

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Presenting the corporate profile of Visa, Cretu said that it is a privately held membership association owned by 21,000 member financial institutions worldwide. Visa has 1.4 billion branded cards in circulation globally. The cards have unsurpassed acceptance in more than 24 million locations in over 160 countries, including 1 million ATMs. Visa connects cardholders, merchants and financial institutions through the world's largest electronic payments network.

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Commercial cards developed to tackle unique problems that today's businesses face include expenses management, cash management and procurement defined as needs. As explained by Cretu, in today's environment, business thrives on management of information, supply-chain management and efficiency. Visa commercial products meet business needs and provide transparency, expense management, cost savings and accurate reporting. Visa government services products help governments reduce

Before joining Visa, Cretu was project manager and manager for North American reporting with HSBC Bank USA, where he was responsible for managing major domestic and cross-border business initiatives. His projects included the creation of a wealth tax subsidiary for HSBC Bank USA; the implementation of HSBC's Corporate Social Responsibility Agenda in the United States, Canada, and Panama; and the outsourcing of various bank services to India. He represented HSBC Bank USA & HSBC Holdings at UN and NAFTA conferences and on the North American UNEP-FI Task Force. bureaucracy and grey economy, thereby increasing tax revenues. The services range from procurement cards, social cards, customs payments to eProcurement. Can Bulgaria's public sector benefit from Visa products? Yes, answered his own rhetorical question Catalin Cretu, explaining that procurement programmes are on cards, together with social and medical benefits payments as well as customs payments on cards too. He gave an example with the experience of the government in the United Kingdom. The total savings to the public purse exceed GBP 200 million in Visa government procurement programs, which means savings of more than GBP 5 million per month. ■

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Environmental Expert Presents EU Environmental Liabilit y Directive

AmCham Bulgaria Magazine

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From Left: Olga Borissova, Director European Programs AUBG, Diana Pazaitova, CEC Government Relations Bulgaria and Randy Mott, Regional Environmental Coordinator for CEC Government Relations, led the discussion with reps of various businesses.

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Randy Mott, Regional Environmental Coordinator for CEC Government Relations was guest speaker at the AmCham EU Affairs Committee Sep. 19 at the Hilton Sofia. In front of 20 representatives of AmCham member companies he presented the EU Directive on Environmental Liability. The committee was chaired by Olga Borissova, director for European Studies in the AUBG, Elieff Center, and co-chaired by Diana Pazaitova, managing director of CEC Government Relations Bulgaria, a leading independent public affairs company in Central Europe and now with office in Bulgaria. The transposition of the EU Environmental Liability Directive (ELD), 2004/35/CE, in Central Europe affects a broad range of companies in complex ways. The Directive is addressing events that occur after April 30, 2007. The Directive creates liability for environmen-

tal cleanup and damages to natural resources, specifically habitats protected by EU Directives. Randy Mott has rich litigation and environmental experience, being involved in 145 hazardous waste sites since 1978. He coordinated water discharge permit proceedings for multiple facilities including industrial plants and remedial projects, litigated air and water permit cases in several jurisdictions. In Poland, Mott worked in privatization of pollution control industry in 1991-1994. The Directive is applicable to a broad type of "operators", as IPPC permits, water discharges, waste permits and transpositions. Mott explained further that the damage covered is narrowly defined: it focuses on corrective actions, not monetary compensation and is generally strict liability for "operators." The Directive uses the term "operator" very

broadly to cover every party actually involved in causing contamination. Some wording in the Directive (Article 9) even suggests a producer of a chemical sold and used by third-parties might be held liable. The national legislation will largely decide the scope of liable parties and whether the liability is truly "strict" or based on fault. Commenting on the current Bulgarian Environmental Protection Law versus ELD, Mott said: "The persons found guilty of harming others by pollution or damage to the environment must be found to remedy the damage. The compensation may be not less than the sum required to repair the damages caused." Damage to the environment is defined as: "Such a change of one or more of the components it consists of which leads to impairment of the quality of life

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of people to a poorer biological diversity or to an impeded restoration of the natural ecosystems." According to the U.S. expert, in case of Bulgaria it is good to have a single set of standards and the European Union model is an excellent one to follow. Unlike some directives, the ELD leaves many issues to the member states' discretion. The scope of liability, the legal defenses available, the scope of habitats covered, and the financial security provisions are all largely open issues. Any business that handles chemicals or produces waste will face a new set of national rules arising out of the transposition process for the ELD. Around 30 representatives of businesses attended the environmental discussion.

Randy Mott further said that there is an opportunity to use the ELD transposition to address other issues in national laws relating to existing contaminated sites. In Poland, for instance, the existing soil contamination standards are rigid numeric criteria that are unrealistically expensive. The ELD uses risk assessment procedures to make this determination, which are much more cost-effective.

There is a logic and appeal to making the existing law use the same criteria, now advocated by the EU. In the Czech Republic, as in Bulgaria, there is no clear soil and groundwater contamination law; authorities use existing laws on water resources and other rules to provide some "make-shift" coverage. Using the transposition law to create an integrated, coherent legal scheme is also appealing.

In general, the interests of all business groups are virtually identical, Randy Mott said. Everyone wants a responsible regulatory scheme that will allow for the risk to become commercially insured on a realistic basis. Mott concluded that the Directive is one of the most controversial, and potentially far-reaching, pieces of environmental legislation negotiated by the EU to date. ■

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Hopes and Dreams Through Education and Franchising

By Charles Gilbert, Berlitz

What is the ultimate purpose of any specific business? Making money for the owners, or perhaps building a great brand name? I think these are only byproducts that come from the achievement of our real goal - and that is of helping our customers realize their own dreams whether large or small.

Language study yields business success Over 20 years ago I was academic director of an English-as-a-second-language program in Texas. One of the many students who came to us from abroad was a recent high school graduate from Mexico. This young lady's family was not happy for her to leave her home for English study in another country, but they finally gave in to her desire to complete a language program in the United States.

AmCham Bulgaria Magazine

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When she finished her English course with a certificate of university-level proficiency, she returned home to Mexico City to major in English and, it so happened, to become an English teacher at the local Berlitz Language Center. After completing her degree she continued with Berlitz and finally formed a partnership to open a Berlitz franchise in Tampico, Mexico, and then a second franchise in the city of Reynosa. Twenty years after she was my student for English, she was my student again in our Berlitz New Franchise Orientation program at our world headquarters in Princeton, New Jersey.

improve their lives: in other words, to reach their own hopes, dreams and desires. In the business of private education and training, as of course in other fields, our financial success depends exclusively on our ability to help our clients reach their personal goals. For Berlitz studentcustomers the goals are access to more and better job prospects, educational opportunities, and career advancement in general. This success pertains also to the human resources manager who chooses Berlitz to train the company's employees - the employees' success reflects positively on the manager's decision making. Our clients already have professional competence. We aim to bring their language competence also to a high level, helping them overcome their fears and shyness in the foreign language so that their language ability commands the same respect that their subject matter knowledge does. With the vehicle of fluency in a new language, they can deploy their talents in broader circles. And in those circles find more opportunities for new growth, networking and professional enrichment.

Language education and franchising in Bulgaria

She told me this was her dream come true: owning her own business. When she enrolled in the English program in 1985, she was not buying an English course; she was investing in her future.

Success of individual people and thus of society itself is the number one goal of education and, as noted, ultimately of business as well. Economic growth and education together drive nations forward. This truth is in harmony with Bulgaria's European Union accession and long-term prospects for continued development.

No business can afford to think only of the immediate product or service it is selling, but rather of the ultimate application of that product and its contribution to society. At Berlitz we are not selling language lessons. Our service is to equip students to realize their potential to gain confidence in conducting their professional life in another language - to

In Bulgaria, we see the demand for a variety of languages, not just English, which reflects modern international business diversity. Similarly, developments across broad sectors of the economy encourage yet more new projects, both international and national. This environment brings opportunity for imagination and hard work. Maximizing

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Berlitz Opens New School Building With a ribbon cutting ceremony on Sep. 18, U.S. Ambassador John Beyrle opened the new school building of Berlitz in Sofia, near the Russian Monument square (31 Macedonia Blvd.) Berlitz Inc. is a worldwide foreign language instruction network. Founded in 1878, today Berlitz has over 400 operations in more than 60 countries around the world. In 2002, Berlitz started an operation in Bulgaria. Foreign language instruction at Berlitz is conducted through the unique Berlitz method - a fast, entertaining and highly effective foreign language instruction technique which focuses on developing learners' speaking skills. At its three language centers in Sofia, Plovdiv and Varna, Berlitz, Bulgaria offers instruction in English, German, French, Italian, Spanish and Bulgarian for foreigners. the yield of this work occupies everyone involved. Entrepreneurs turn to experienced resources for guidance, especially when a project is envisioned as the first of its kind in the market. Often the necessary expertise lies beyond national borders in the form of a franchised business system. Many factors complicate the cross-border introduction of expertise for new business concepts. How can a multinational company ensure proper implementation of its system, values and know-how when starting from scratch in a new market? Instead of entering a market with direct investment, a growing number of companies are choosing the franchising model. Contemporary "business concept" franchising provides not only a proven brand name for local use, but also an "operating system" to define that franchisor's

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entrepreneurs who wish to benefit from the proven success of an international business concept, and conform to its tenets, franchising provides a unique opportunity. The entrepreneurs are still responsible for the ultimate success or failure of the local franchises, but they have the advantage of using a system already refined through other people's trial and error. These entrepreneurs, by virtue of being local persons, provide the market knowledge and business expertise appropriate for application in the territory. To a franchisor these two points are key advantages. Working together the franchisee and franchisor see the brand take root more quickly and yield sweeter fruit than if the entrepreneur worked alone.

characteristic procedures, as well as essential "ongoing support" personnel to insure implementation of that system. Rapidly developing national economies

with growing legal and physical infrastructures offer franchisors an environment that generally moves forward on the energy of an expanding entrepreneurial spirit. In this context, for the

Our franchise goal at Berlitz mirrors our educational goal: we are the personal coach and trainer to help students and franchisees alike develop confidence in their performance. With this achievement they can realize their greatest dreams. ■

AmCham Bulgaria Magazine p a g e

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CENTURY21 Enters the Bulgarian Market

From Left: Todor Groudev - Executive Chairman, Century21 Bulgaria, together with James Rigassio, US Commercial Attache and Alexander Karagiannis, Deputy Chief US Mission to Bulgaria.

Century21 appears on the Bulgarian market 35 years after its foundation in Parsippany, New Jersey. Currently, more than 8000 offices and over 144 000 sales associates operate on 5 continents. The company is already established in more than 48 countries around the world. The services and systems offered by Century21 are identical for all partners and clients regardless the continent or country they are in.

Century21 will provide professional business consulting to the individual offices in regards to their successful establishment and development on the market. The main goal is to optimize the management of all offices, which will allow for the most effective use of each agent's abilities and for the maximization of profits. ■

The Bulgarian office will be offering all franchise products and systems of Century21 for this country and for the FYRO Macedonia. The main goal of the company is to add to its global family as many as possible companies and offices operating in the real estate sector.

October 2006 AmCham Bulgaria Magazine

The sale of Century 21 franchise products and systems includes: "know-how", brand name (the use of trade marks, owned by Century21 LLC), access to the world-wide Century21 network, training, business consultation. The rules and systems, which Century21 has been establishing already for 35 years are a premise for order and consistency, direly needed on the real estate market.

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Century21 Bulgaria strives to create a situation on the real estate market in which everyone could sell their property at any moment and simultaneously acquire a new one in an effortless and painless process. Utilizing information technologies, not only to track information, but also to acquire a professional advantage in marketing, the company uses established multinational instruments and applications in the real estate business.

From Right: Thomas Kunz - President, Century21 LLC , Onik Latfian - Executive Director, Century21 Bulgaria, Nikolaos Pratikakis - Managing Director, Century21 Greece & Cyprus, Paris Zachariades Executive Chairment, Century21 Greece & Cyprus, Mrs. Dona Kunz - wife of Mr. Thomas Kunz

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Privatization Agency Endorses Interim Certificate granted to CEZ for the Purchase of TPP Varna The Privatization Agency endorsed to CEZ a.s., Czech Republic the interim certificate for 572 821 shares, representing 100% of the capital of "TPP Varna" EAD, after the Buyer had paid the total purchase price. Thereby the Czech company acquires the right of possession of the shares sold and the privatization procedure is terminated. On October 2 Citigroup, which is the escrow bank in the transaction, after receiving a termination notification, transferred the purchase price on the Privatization Agency's account. That was the final preliminary provision, preceding the transfer of 100% of the shares of TPP Varna to the Buyer CEZ a.s., Czech Republic. The temporary letter-certificatory was signed by the Executive director of the Privatization Agency - Mr. Todor Nikolov, who thanked the teams of CEZ, Citigroup and the agency for the professionalism and expressed his certainty that the benefits for the Bulgarian society from this transaction soon will be felt, as a result of the experience, competitive prices and the European management, typical for the Czech Company.

Consultant on the transaction on the part of the Privatization Agency was "Credit Suisse First Boston" (Europe) Limited, London. The experts of the international bank have worked in consortium with Linklaters Miculiti & Asociatii scpa, "Earnst and Young Bulgaria" EOOD, Sofia and legal office "Djingov, Guginski, Kjuchukov and Velichkov". The parameters of the privatization contract: The Buyer shall acquire 100% of the company's shares. The price of the shares to be sold (total number of the shares - 572 821) is to the amount of EUR 206 003 616,23, price per share - EUR 359,63. The Buyer is obliged to finance capital growth of the company with 16%, through emission of new shares to the amount of EUR 99 879 680,27, which are to be owned by the Buyer. It is allowed non-cash payment for 53 800 shares of TPP Varna. The Buyer is obliged to keep

the major subject of activity of the company for at least 3 years, as well as to withhold from undertaking or supporting such actions as: termination, liquidation, merger, acquisition, division, separation, etc. which could transform the company itself. The Buyer is obliged to ensure that the activities of the company are in accordance with the granted licences. The level of expenses for manpower and wages at the end of each of the three years should be at least the same as those the company had made till 31th of December, 2005. The Buyer is obliged to keep the restrictions for air contamination, caused by heavy fuel equipment, as well as to observe for general prevention and pollution control. The Buyer is obliged to accomplish all activities, dependent on him, in order to ensure the acting of the company in accordance with the stated requirements. ■

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Mr Bogdan Malanuik, Head of the Team "Mergers and Acquisitions for Eastern Europe" thanked the legal team and CA-IB, who consulted and structured the transaction on the part of the Buyer, and also to the Privatization Agency for the perfectly done work and stated that this transaction once more confirmed the serious investment commitments of the

Czech company in Bulgaria.

AmCham Bulgaria Magazine

Amin Manekia, Citigroup Country Officer for Bulgaria said, "It is an honour and privilege for Citigroup to host the closing of the privatisation of Varna TPP. Citigroup is proud to have worked along with the Government of Bulgaria and CEZ on this landmark transaction and to have played a role in the closing of one of the largest privatization deals in 2006 in Bulgaria."

From left: Bogdan Malaniuk (CEZ), Amin Manekia (Citigroup), Todor Nikolov (PA)

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Anglo-American School of Sofia Turns 40, Moves to New Home Students from 42 nationalities receive elite education through 9th grade The confirmation of Bulgaria's upcoming EU membership seems to be a fitting present for the 40th anniversary of the AngloAmerican School of Sofia. But that is not all this educational institution has to brag about. On Sep. 10, 2006, the entire AAS community, alumni and families, friends and business partners celebrated the grand opening of the new state-of-the-art school complex. U.S. and U.K. ambassadors John Beyrle and Jeremy Hill, Sofia's mayor Boyko Borissov, and a deputy minister of foreign affairs, Gergana Grancharova, welcomed everyone and congratulated AAS on this achievement. "This school is a symbol of the significance Bulgaria has as a site for foreign investments. It is an expression of our investments in the future of Bulgaria,"

Their excellences Ambassador John Beyrle, Ambassador Jeremy Hill, the Mayor of Sofia Boiko Borissov, and the Deputy Minister of Foreign Affairs Gergana Grancharova welcomed everyone and congratulated AAS on this achievement.

Ambassador Beyrle said in his greeting at the ceremony. Accredited by the Council of International Schools and New England Association of Schools and Colleges, AAS represents the best practices and teaching methods in international education in Bulgaria. Offering an instructional program from prekindergarten to 8th grade in previous years, AAS has now opened a 9th-grade class. With this addition, the school is committed to developing a full high school program in the next few years. Hosting students from some 42 nationalities, the new school complex of the Anglo-American School is an outstanding combination of modern style and Bulgarian Revival architecture. The new facility provides students with all the necessary space, light, comfortable classrooms, and at the same time, keeps the feeling of home, learning comfort and aesthetical warmth inside and outside the building.

Mr. Eric Larson, Director of AAS showing to the gestts the new school facilities.

AmCham Bulgaria Magazine

October 2006

The school now has a huge and bright gym, which provides daylight through its unique roof construction. Most of the classrooms on the second floor also receive natural illumination through skylights. Rainwater and underground water are captured and drained into a retention pond. The water from the retention pond will be used for watering the playgrounds, said Eric Larson, director of AAS. He hopes to develop the pond into environmental center in the near future.

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A regulation size soccer field is being built by the pond. It will be ready for use next spring. New tennis courts are already open. The lower school playground facility offers the children a rich variety of opportunities to play. Sixteen solar panels heat water, allowing constant provision of hot water for the children. The basement ceilings are exposed on purpose so the students are able to see the water pipes and other infrastructure inside the building. Every detail is planned to be used to further their education.

The new home of AAS

Another accent of the building is the great new library - a large 300 sq. m space, situated in the front part of the campus. The library complex includes a separate center for students and parents, and a small conference room for video watching. Surrounded by a stunning views of the mountain, staffed with devoted teachers who utilize the best education practices, AAS is ready to take a leading role in the advancement of education in Bulgaria. As an international school, AAS intends to support Bulgarian education system in its efforts to meet the standards of the expanding European Union. ■

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Ivan Trassiev during his play

Krassimir Guergov (right) presented the trophy to Ivan Trassiev.

National Golf Tournament Showcases Young Stars, Experienced Players he State National Golf Championships took place on Sep. 16-17 at St. Sofia Golf Club& Spa. The tournament - first of its kind - was organized by the Bulgarian Golf Association in partnership with Vivatel, and is one of the most important events of the golfing year.

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The cream of the Bulgarian golfers entered with players competing in the four categories: men, ladies, junior boys, junior girls.

AmCham Bulgaria Magazine

October 2006

The course was in perfect condition, with the full front nine holes (played twice) opened for this event. Several new bunkers had also been added to the course which considerably tightened the approach to many greens. The wind was a factor on both days and certainly proved to be the doom of many players who returned uncharacteristically high scores.

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The format of the men's and ladies' competition was 'gross,' which meant that players would have to record each shot played. Peter Kaloyanov, a young member of the national team returned an excellent 77 gross in round one. He was closely followed by Ivan Trassiev on 78 gross, who had made a great recovery from an injury in a skiing accident earlier in the year. Other good scores were Roumen Anastassov on 79, Stefan

STANDINGS men GROSS IVAN TRASSIEV, 1st PLACE (152 GROSS) MICHAEL KANEV, 2nd PLACE (156 GROSS) ROUMEN ANASTASSOV, 3rd PLACE (157 GROSS) women ILIANA DIMITROVA, 1st PLACE (172 GROSS) juniors boys MICHAEL KANEV, 1st PLACE (148 GROSS) juniors girls SVETOZARA GENOVA, 1st PLACE, (136 GROSS) Kralchev on 79, Michael Kanev on 81and and Ivo Bojkov on 82. In the ladies category, Iliana Dimitrova, recognized as being the best lady golfer in Bulgaria was a clear leader after round one with an 84 gross. Day two and the blustery conditions continued. There was a buzz of excitement as the last two groups teed off. The Men's winner would come from one of these two groups as the leaders were playing together. The leader, Peter Kaloyanov, had an unfortunate start to his round, but playing with the experienced Roumen Anastassov and Ivan Trassiev it was clear that win or lose, he would

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The winner in Junior Girls - Svetozara Genova

benefit from this experience. Another youngster, Michael Kanev, a national team member, playing in the second group made a great comeback from a poor start, and began the back nine with an eagle, birdie, birdie! This put him back into contention with Ivan Trassiev who was a model of consistency. Roumen Anastassov also was not backing off and returned a level par 36 for the front nine.

Iliana Dimitrova finished with an 88 in her second round and she claimed the title of Ladies State National Champion for 2006. The young Svetozara Genova had an excellent 84 in her second round and she will be a player to watch in the future. She won the trophy for Junior Girls National Champion.

Gary Radcliffe of Vivatel presented the trophy to Iliana Dimitrova, the Ladies National State Amateur Champion for 2006 and confirmed Vivatel's commitment to the development of junior golf and to the growth of amateur golf in Bulgaria. ■

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nett

tot tot gross nett

Ivan Trassiev

8

78

70

74

66

152 136

Michael Kanev

4

81

77

75

71

156 148

Roumen Anastassov

5

79

74

78

73

157 147

Emil Markov

9

83

74

78

69

161 143

Ivo Bojkov

12

82

70

81

69

163 139

Teodor Todorov

14

84

70

85

71

169 141

Jivko Tenev

7

87

80

82

75

169 155

Petar Kaloyanov

10

77

67

93

83

170 150

Stefan Kralchev

12

79

67

92

80

171 147

Iliana Dimitrova

11

84

73

88

77

172 150

Konstantin Ikonomov

10

86

76

92

82

178 158

Atanas Golomeev

20

88

68

91

71

179 139

Svetozara Genova

22

96

74

84

62

180 136

Georgi Boyadjiev

11

93

82

88

77

181 159

Krassimir Guergov

17

90

73

92

75

182 148

Georgi Golomeev

19

91

72

92

73

183 145

Nikolay Dimitrov

13

87

74

96

83

183 157

Miroslav Kaneti

19

95

76

90

71

185 147

Emil Kaloyanov

17

90

73

95

78

185 151

Borislav Malinov

19

93

74

95

76

188 150

Svetlozar Petrov

25

98

73

92

67

190 140

Ventsislav Stoilov

17

95

78

95

78

190 156

Todor Krastev

18

94

76

97

79

191 155

Kalina Markova

21

97

76

95

74

192 150

Ivaylo Gumishev

20

92

72

102

82

194 154

Hristo Chepishev

21

96

75

99

78

195 153

Krassen Pendov

18

102

84

93

75

195 159

Ivan Golomeev

20

103

83

95

75

198 158

Dimitar Radev

13

98

85

100

87

198 172

Iordan Boshnakov

26

100

74

99

73

199 147

Radoslav Rashev

19

98

79

101

82

199 161

Alexander Evtimov

18

108

90

91

73

199 163

Boris Chakarov

13

99

86

101

88 200 174

Andrey Russinov

26

104

78

99

73 203 151

Bojana Dimitrova

27

105

78

99

72

204 150

Yuli Botev

21

106

85

98

77

204 162

Rumiana Guergova

31

104

73

105

74 209 147

Denislav Skorchev

20

105

85

105

85

210 170

Oleg Chernev

26

105

79

109

83

214 162

Bilian Balev

24

102

78

115

91

217 169

Grigori Grigorov

26

113

87

106

80

219 167

Polina Girginova

25

98

73

121

96

219 169

Boris Konstantinov

26 111 85

109

83 220 168

Nikola Kiurkchiev

25

113

88

108

83

221 171

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Young star Michael Kanev took the Junior Boys National Champion title. Krassimir Guergov, President of the BGA presented the trophy to Ivan Trassiev, the Men's State National Amateur Champion for 2006.

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AmCham Bulgaria Magazine

Ivan Trassiev stepped up a gear and completed the back nine in a brilliant two under par 34 strokes. This gave him a total of 74 to go with his 78, and would prove to be too good for a chasing Michael Kanev who completed his round in a brilliant 75 strokes to go with his first round 81 and second place. Roumen Anastassov finished with a 78 and put in a creditable performance to claim third place.

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Moody International (ISO Certification Body / Registrar) is a world-wide, multiaccredited, Quality organization providing professional, cost effective and nonbureaucratic assessment and certification / registration services of Quality Management Systems to the internationally renowned ISO 9000, ISO 14000, AS 9000, ISO 3834, QS 9000, TS 16949, OHSAS, HACCP and VDA 6.1 Quality Standards. Moody International is also an accredited notified body for CE Marking/PED requirements. Moody International Certification is also authorized by IRCA [International Register of Certificated Auditors] to provide Lead

Auditor and Internal Auditor training services. A certificate of successful IRCA registered course completion is one of the pre-requisites to becoming an officially registered IRCA Lead Auditor or Internal Auditor of Quality Systems. Courses can be presented in various languages.

The first office of Schenker in Bulgaria was established in 1889. After the World War II it was nationalized and closed. Schenker returned in Bulgaria again in 1993, when Schenker Bulgaria as 100% Schenker AG subsidiary was registered.

Schenker EOOD was certified in 2002 to ISO 9001-2000 by the Austrian company OQS. The company joined the Top 100 of Bulgarian companies with highest revenues for 2004, ranked by the Bulgarian Chamber of Commerce and Industry. In 2005 Schenker succeeded even to move up to the 77 position in the list.

AmCham Bulgaria Magazine

October 2006

Based on the Schenker-principles dynamics, reliability, quality, the company ranked in a short time the leaders on the logistics market. Schenker EOOD is offering in Bulgaria the full range of logistics services: land, air and sea operations as well as fair and removal services, customs brokerage and insurance. Besides the head office in Sofia the company has 5 branches in the country - in Bourgas, Plovdiv, Rousse, Sevlievo and Varna, with over 134 employees.

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UNITED MEDICAL COMMUNICATIONS is a sales and marketing company, which specializes in marketing and sales of a broad range of products: prescription medicines, over the counter medicines, nutritional supplements and rapid clinical tests. UNITED MEDICAL COMMUNICATIONS is committed to the highest standards of marketing and sales excellence. The current partners of UNITED MEDICAL COMMUNICATIONS are Bristol-Myers Squibb (USA), Flora Health (Canada), GNC (USA). UMC strives to develop trusted relationship with other companies, wholesalers, physicians and pharmacists to pursue opportunities in the

Contacts: Ivan Savov Manager Tel: 950 0640 Fax: 950 0640 E-mail: [email protected] 3, Narodno Sabranie Sq., Fl. 3 1000 Sofia

Contacts: Vassil Atanassov Marketing Manager Tel: 9429 100 Fax: 973 1839 E-mail: [email protected] 7, Iskarsko Shosse Blvd. 1592 Sofia

healthcare industry. UMC has 45 employees and in 2005 reached 7.5 mln euro turnover of the marketed products in Bulgaria. UMC is a member of AESGP -European Association of Self-Medication Industry. Contacts: UNITED MEDICAL COMMUNICATIONS Ltd 6, 20th April Sofia 1606 Bissera Pramatarova, MD Executive Director Tel: 9533654; 952 2934 Fax: 953 1692 [email protected]

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