MRF’s Peevski and Tsonev proposing bill restricting offshores owning companies in several sectors

Parliamentary budget committee head and Movement for Rights and Freedoms MP Yordan Tsonev and Delyan Peevski are proposing a bill that would severely restrict offshore companies from participating in key areas of Bulgaria’s economy, from banking to pension firms and media ownership.

Tsonev said this in an October 15 interview with Nova Televizia, which also posted on its site a draft of the bill, which limits participation of offshore companies in 20 different areas in the economy.

According to Tsonev, Peevski was involved because of his “valuable knowledge and experience as a lawyer”.

Peevski, whose rapid election by Bulgarian Socialist Party and MRF MPs to head the State Agency for National Security lent vast bulk to a still-continuing series of anti-government protests, is currently an MP, according to the outcome of a Constitutional Court process on October 8.

Bulgarian media said that Peevski, elected to the National Assembly in 2009 and again in 2013, attended Parliament infrequently and this would be the first bill in which he would be involved in tabling.

Tsonev, who has been working on the legislation for the past six months, said that Peevski would come in person to present their proposed legislation to a plenary session of Parliament.

Peevski is the son of Irina Krasteva, of the New Bulgarian Media Group, which has large-scale media ownerships in Bulgaria.

Tsonev said that the legislation affecting the media was being introduced because of the expectations of society against the background of constant suggestions of a lack of transparency in media ownership.

An explanatory memorandum on the draft bill said that “in recent years global experience shows that companies established in jurisdictions with a preferential tax regime are not only used for aggressive tax planning and tax evasion, but these companies are investing capital of obscure origin and acquired by the criminal activity of international criminal and terrorist organisations.”

The memorandum said that to combat tax fraud and tax evasion as well as aggressive tax planning schemes used by companies in low-tax jurisdictions, the European Union, OECD and G20 had launched a major joint programme, the aims of which include increasing the transparency of tax systems , promoting the exchange of information for tax purposes between countries, promoting disclosure of jurisdictions with low tax and strong resistance against jurisdictions with preferential tax treatment by blocking the ability of taxpayers to avoid taxes.

The bill being proposed was directly related to these aims of the programme, according to the memorandum.

It proposes a ban on companies registered in low-tax jurisdictions operating in “the most important areas of the economy or acquiring companies operating in similar areas that are particularly sensitive to the protection of the public interest”.

The bill defines any body, whether local or foreign, controlled by a company registered in a low-tax jurisdiction as being included in the restrictions.

It also bans such companies from taking part in public tenders, privatisations, in competitions to acquire state or municipal property, while the list of activities from which such companies would be banned includes credit institutions, insurance, pension funds, health insurance, prospecting and mineral exploration, privatisations involving municipal property, excise warehousing, creating or acquiring a stake in a professional sports club, a priority investment project under the Investment Promotion Act, participation in the procedure for a licence under the Energy Act and the Gambling Act, trade in dual-use goods, participation in the procedure for a licence as a mobile operator, a licence or contract for delivery or removal of water, waste collection. The media provisions bar such companies from acquiring radio and television broadcast licences under the Radio and Television Act or from establishing or acquiring the holding of a print publication.





The Sofia Globe staff

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