Opinion on a proposal to amend the Act on the Introduction of the Euro in Bulgaria

TO

NATALIYA KISELOVA CHAIRPERSON OF THE NATIONAL ASSEMBLY OF THE REPUBLIC OF BULGARIA

ROSEN ZHELYAZKOV PRIME MINISTER OF THE REPUBLIC OF BULGARIA

TEMENUZKA PETKOVA MINISTER OF FINANCE

DELYAN DOBREV, CHAIRPERSON, COMMITTEE ON BUDGET AND FINANCE OF THE 51ST NATIONAL ASSEMBLY

COPY TO:

DIMITAR RADEV GOVERNOR, BULGARIAN NATIONAL BANK

POSITION

REGARDING: Draft Law on Amendment and Supplement to the Law on the Introduction of the Euro in the Republic of Bulgaria, incoming No.: 51-502-01-36.

Dear Ladies and Gentlemen,

On behalf of the undersigned organisations, we express our joint position on the draft law on amendment and supplement to the Law on the Introduction of the Euro in the Republic of Bulgaria. We represent thousands of Bulgarian employers from dozens of different industries and are united in our position that the proposals made carry enormous risk for the business environment in Bulgaria.

I. Early introduction of the obligation for dual display of prices from 8 August 2025 and extension of the prohibition on price changes

Proposed amendment: In para. 2, the words "one month after the date of entry into force of the Decision on the adoption of the euro" shall be replaced with: "on 8 August 2025," and the words "12 months after the date of the introduction of the euro in the Republic of Bulgaria" — with: "on 31 December 2026."

The introduced change, providing for the commencement of the mandatory dual display of prices from 8 August 2025, creates serious difficulties, especially for economic operators using software solutions for the management of pricing and labelling. This early shifting of the deadline — only one week after the publication of the European regulation — represents a substantial correction relative to the previously established and applied deadline under the current law, in relation to which business has already begun preparations, investments and operational actions since the very beginning of the process of adopting the LIERB, more than 18 months ago.

In addition to causing serious administrative and organisational burden for enterprises, this early introduction violates the principles of legal predictability and proportionality. More importantly, the new deadlines come into direct conflict with Article 19 of the Constitution of the Republic of Bulgaria, which guarantees free economic initiative. The adoption of restrictions that in practice block the possibility of adapting pricing policy to market dynamics goes beyond the bounds of normal state regulation and can be interpreted as interference in free competition.

The administrative restriction or freezing of prices, especially under market economy conditions, is not only unjustified from a legal perspective, but also economically inefficient. Such measures distort competition and create an environment in which the effective mechanisms of supply and demand are suppressed.

II. Prohibition on price changes during the period of dual display

The text envisaged in the draft:

"(4) During the period of dual display, traders may not increase the prices of the goods and services they offer when this is not justified by objective economic factors."

essentially significantly extends the temporal scope of operation of Art. 25 of the LIERB. Instead of only during the period of dual circulation (1 month), the restriction is extended to the end of the dual display phase — i.e. for a period of over 17 months.

We consider that this leads to a de facto freezing of prices for a long period of time, without a clear and explicit economic justification. Such an extension of the restrictions significantly exceeds the scope of a temporary measure for the protection of consumers and again comes into conflict with the principles of free economic initiative guaranteed in the Constitution.

The formation of final consumer prices in retail trade depends on a complex of dynamic factors — including fluctuations in supply prices, changes in consumer demand, seasonal influences, transport and logistics costs, wage growth, overhead costs, commercial rents, marketing and shrinkage costs. For imported products, currency risk, customs and logistics costs must also be taken into account, and the final price includes 20% VAT.

Furthermore, in commercial practice a mixed pricing model is widely applied, under which certain items are offered with minimal profit or even without profit, with the aim of achieving optimal positioning of the main consumer basket. Changing the price of one product is often connected with the need for compensation in other product categories, which makes the fixing of price levels impossible without violating business logic.

Such intervention in market mechanisms, especially over a prolonged period, can lead to the distortion of supply, the restriction of choice and ultimately to adverse effects for consumers themselves.

III. Technical requirements for the display of prices

Proposed amendment: In Art. 16, the following amendments and additions are made: In para. 1, after the words "of the same size," a comma is placed and "type and colour" is added.

"(2) The two prices are accompanied by the writing of the respective currency, distinguishing mark or abbreviation, made with the same font size as per para. 1, allowing their easy recognition."

Comment: The imposition of this new requirement with such a short deadline before the start of the actual obligation for dual display of prices creates serious difficulties for traders, especially those working with specialised electronic pricing systems. These systems typically require considerable time and effort for technical adaptation, and until now no such requirement existed in the regulatory framework.

It should be emphasised that throughout the entire preparation and introduction phase of the LIERB — over 18 months, including the period of public consultation and voting — such a requirement was not envisaged. As a result, many traders have already completed or are at an advanced stage of synchronisation between the legal requirements and the software architecture of their systems. The retrospective introduction of a new criterion at such a late stage objectively prevents business from responding adequately in time, especially when dealing with interfaces with visual limitations or pre-created templates for the design of electronic labels.

In addition to creating logistical and technological difficulty, such a measure undermines confidence in the stability and predictability of the regulatory process, which is key for business planning and legal certainty.

Proposed amendment: "(5) When returning the balance under para. 1 in euros or the amount paid under para. 3 in euros, the trader shall provide information regarding the monetary value of the balance or the amount paid in leva, upon request by the consumer."

Comment: The wording of the text leaves ambiguity regarding the form in which the information on the lev equivalent should be provided — whether an oral statement would be sufficient or whether written confirmation is required.

It is important to note that a requirement for written form would lead to a technically impossible and operationally unenforceable situation in practice. This is particularly true for outlets with high turnover or automated cash register systems, where such a procedure would slow down service and create organisational chaos. The clear definition that an oral statement is sufficient will eliminate the ambiguity and allow traders to comply with the requirement without excessive administrative burden.

IV. Supervisory powers and duplication of functions between state bodies

Comment: The draft law envisages the assignment of supervisory powers for compliance with the requirements of the LIERB to both the National Revenue Agency (NRA) and the Commission for Consumer Protection (CCP). This expansion of the institutional supervisory scope appears neither effective nor justified by practical necessity.

Commercial entities are already subject to strict and consistent supervision by a number of state institutions. Assigning new powers to additional bodies, without a clear delineation of competences, will lead to the duplication of functions and an increase in administrative burden, both for business and for the supervisory structures themselves.

It should be particularly emphasised that the Commission for Protection of Competition (CPC) already has existing statutory powers to monitor and analyse market processes, including price dynamics and potential abuses. Expanding the powers of the CCP in this direction, without additional resources or coordinated mechanisms, can lead to ineffective supervision and a risk of overlap and administrative arbitrariness.

Proposed amendment: Creation of Art. 55a with the following content:

§ 10. Art. 55a is created:

"Provision of information and assistance

Art. 55a. (1) In the performance of their official duties, the officials of the Commission for Consumer Protection and the National Revenue Agency have the right to require within deadlines set by them from any natural or legal person any information that is relevant to the inspections being carried out, including regarding the level of prices for a period determined by the official, whose start date is no earlier than 1 January 2024, the method of pricing, supply and production prices, each of the components included in the final sale price of the goods or service, as well as data that is relevant to the correct application of this law.

(2) The supervision under para. 1 may be carried out at premises where economic activity or the management of economic activity is conducted — production premises, shops, warehouses, offices, surgeries, offices and similar, as well as in premises and places where accounting, commercial and other documents or information carriers related to the activities of the supervised persons are stored.

(3) Every inspected person is obliged to provide assistance and not to obstruct the supervisory authorities in the performance of their duties.

(4) Persons from whom information and assistance have been requested are obliged to provide them within the deadline set by the officials and may not invoke production, commercial or other legally protected secrecy."

Comment on the proposed text: The formulations in paras. 1 and 4 raise serious concerns regarding the lawfulness and proportionality of the supervisory mechanisms. The absence of clear parameters regarding the deadlines for the provision of information creates conditions for arbitrariness. To guarantee effectiveness and the protection of traders' rights, a possibility for extending deadlines should be provided, in the event that the initial deadline is objectively insufficient.

Particularly alarming is the envisaged removal of the possibility of invoking legally protected commercial or production secrecy. Such a provision is in direct conflict with the current regulatory framework in the Law on Protection of Competition, which has an entire chapter governing the procedure for handling confidential information. The inclusion of analogous mechanisms in the LIERB is absent, as is such provision in consumer legislation, and this creates legal uncertainty and serious risks of violation of fundamental economic rights and the competitiveness of economic operators.

In conclusion, the expansion of the scope of state supervision must be carefully considered and must be in full compliance with the principles of the rule of law, legal certainty and the protection of trade secrets.

V. The discriminatory nature of the new obligations for large traders and the risk to competition

Proposed amendment:

"Provision of information by traders

Art. 55b. (1) During the period of dual display of prices of goods and services, traders carrying out activities with a subject of retail trade in food products, alcoholic and non-alcoholic beverages, tobacco products, non-food goods and medicinal products, with a turnover for the preceding year exceeding BGN 10,000,000, are obliged to publish on the last working day of each working week, in a machine-readable format allowing data extraction, on their websites information on the final sale prices of all goods offered for sale during that period from the composition of the large consumer basket.

(2) Where in the individual outlets of a trader, the same goods are offered at different final prices during one and the same period, the data under para. 1 are published separately for each outlet.

(3) The Commission for Consumer Protection creates and maintains a publicly accessible internet portal and publishes weekly information on price movements on the basis of the information published in accordance with paras. 1 and 2."

Comment: The proposed regulation creates impermissible differentiated treatment of one specific group of economic operators — large retailers — and without a clear justification as to why precisely they should be subject to additional obligations. In essence, this constitutes a discriminatory provision that introduces disproportionate obligations, with no equivalent for the other market participants.

From the perspective of competition law, the proposed provision creates a real risk of restricting competition, as it requires certain traders to disclose sensitive information about their current pricing behaviour in near real time. This creates an artificial transparency that is not natural for the fast-moving consumer goods market. Although the official aim is better consumer awareness, in practice the provision benefits other traders in particular, who will be able to monitor, analyse and align their own pricing policy with that of competitors — in violation of the fundamental principle that every undertaking must independently determine its commercial strategy.

According to the Guidelines on information exchange between competitors (§ 20 of Decision No. 1778/20.12.2011 of the CPC), any form of coordination, including through the intermediary of a public body, that reduces uncertainty between market participants may lead to the restriction of competition. The current practice of the CPC confirms this: in Decision No. 81/23.01.2025, it is emphasised that with a high degree of price transparency for substitutable products, traders can easily adjust their policy, which can lead to price convergence and the elimination of competition, including at the regional level.

Furthermore, the CPC has already expressed a critical position on a similar initiative: during the discussion of the creation of a Central Register for food traceability in 2023, the Commission clearly stated that a requirement to publish sensitive commercial information may violate Art. 15, para. 1 of the LPC and Art. 101, para. 1 of the TFEU (Decision No. 347/06.04.2023).

An additional problem is the disproportionate administrative burden for the traders subject to the new obligations. They will have to:

— maintain their own database in publicly accessible form on their website; — simultaneously send the same information to the Ministry of Economy and Industry in a different machine-readable format, according to guidelines that have not yet been publicly announced; — adapt existing systems that are already burdened with the euro changeover process and increased regulatory supervision.

This not only creates a duplication of obligations, but also makes their fulfilment technically and organisationally difficult, if not impossible, without prior clarity on the technical requirements.

Conclusion: Although the proposed measure aims to facilitate consumers through better awareness, the actual effect may be the opposite: — violation of the equality of market participants; — creation of conditions for price convergence between competitors; — increase of barriers to entry for new participants; — disruption of the balance between market freedom and state intervention.

In view of the above, we consider that the proposed provision should be reviewed or completely excluded from the draft law, taking into account not only the good intentions but also the serious legal and economic risks it generates.

VI. Disproportionate increase in financial sanctions — risk to business sustainability

Proposed amendment: Art. 59, para. 5, item 6 — a financial sanction of 0.5 percent of the turnover realised in the preceding financial year is imposed, and in the case of a repeat violation — 1 percent of the turnover realised in the preceding financial year; where there is no turnover realised for the preceding financial year, a financial sanction of 0.5 percent of the turnover realised at the time of establishment of the violation for a period of no more than 12 months back is imposed, and in the case of a repeat violation — 1 percent of the turnover realised at the time of establishment of the violation for a period of no more than 12 months back.

Comment: The possible imposition of sanctions on the entire annual turnover of an undertaking, regardless of the nature and severity of the violation, as envisaged in the draft law, represents a disproportionate and potentially destructive measure. Such a sanction can realistically threaten the survival of a commercial entity, especially in the context of growing regulatory and market challenges.

It should be noted that the proposed mechanism provides for the calculation of the sanction on the entire turnover of the undertaking, rather than on the specific turnover or market segment connected to the violation. This is an extraordinarily restrictive approach, especially taking into account that violations of the LIERB do not affect fundamental aspects of competition, nor do they lead to structural distortions of the market.

There is a real risk that the sanction may exceed the harmful impact of the act severalfold, especially for large traders with high turnover, whose profitability is often low due to the volume of fixed costs and price pressure in the sector.

The proposed sanctioning model is clearly borrowed from the Law on Protection of Competition (LPC), where it is applied in cases of serious violations such as cartels, abuse of dominant position or anti-competitive practices. Even there, however, the sanction of up to 10% is calculated only on the revenues from sales of products affected by the violation, and not on the overall turnover of the company. In the case of the LIERB, however, an analogous sanction is proposed without accounting for the fact that the subject matter of the violations is entirely different — most often related to technical or administrative non-compliance, rather than distortion of the competitive order.

Sanctions calculated on turnover are by their very nature a drastic intervention in the economic stability of undertakings and must only be applied in extreme cases and where a corresponding degree of public danger exists. The present draft law, however, does not offer such a distinction by severity, but instead sets an equal and high threshold for every violation, regardless of the consequences, intentional nature or scope of the violation.

Conclusion: In view of the above, we insist on the introduction of a more precise, differentiated and proportionate sanctioning system, taking into account the severity and consequences of the violation, as well as the turnover connected to the specific activity within which it was committed. The wording proposed in the draft law should be reworked so as to be consistent both with the principles of fairness and legal certainty and with the need for predictability and economic stability for business under the conditions of the introduction of the euro and increased regulatory burden.

VII. Violation of procedural requirements under the Law on Normative Acts (LNA)

Comment: The procedure for adopting the amendments under consideration to the Law on the Introduction of the Euro in the Republic of Bulgaria (LIERB) does not meet certain requirements established in the Law on Normative Acts (LNA) and the Administrative Procedure Code (APC). These include the provision of a period for familiarisation with the changes to the LIERB, as well as the preparation and publication on the website of the respective institution of reports, motives for the adoption of the changes, and a preliminary impact assessment.

The absence of such a period places the participants in legal and economic life in an objective impossibility to prepare and respond in a timely manner, especially given the high degree of complexity and impact of the proposed changes.

The absence of the corresponding documentation and justification for the draft law also prevents an objective and evidence-based assessment of: — the expediency of the proposed measures; — the expected economic, administrative and social impact; — the conformity of the proposed regulation with the principles of the rule of law.

This calls into question not only the legitimacy of the process, but also the quality of the proposals. These omissions are not formal but substantial — as they obstruct the conduct of a transparent, democratic and informed legislative process, as required by Bulgarian and European law.

Conclusion: In view of the above, we consider that the proposals should be returned for reworking and proper consultation with the affected parties, including through: — open publication of the draft; — provision of a complete package of motives, impact assessment and reports; — provision of a period for public consultation of no less than that required by law.

Only upon fulfilment of these conditions can we speak of a legally valid and publicly legitimate adoption of legislative changes of such magnitude and consequences.

VIII. Additional administrative burden and lack of a transitional period

Comment: The proposed package of regulations in the draft law, considered in its entirety, leads to a serious increase in the administrative burden for the economic entities within its scope. The requirements for the provision of additional data, including in specific technical formats, combined with the absence of any transitional period, place business in an objective impossibility of adapting to the new obligations without significant difficulties.

This is happening in a context in which traders are already subject to intensive supervision by numerous regulatory bodies in connection with the preparations for the introduction of the euro, including with regard to price stability, transparency and consumer protection. The capacity of organisations is already largely engaged with ongoing inspections, software adaptations, staff training and internal procedures related to the overall changeover to the new currency.

In this context, any additional regulatory burden, especially when introduced without sufficient notice and without an adaptation phase, leads to disproportionate difficulties that can compromise both the good-faith application of the law and the overall sustainability of the euro introduction process.

There is a real risk of operational blockage in large commercial systems, where the integration of new obligations requires serious coordination between departments, software solution providers, auditors and external consultants.

Conclusion: We consider that the application of the new requirements should be accompanied by: — a clearly specified transitional period, corresponding to the real adaptation capabilities of business; — the limitation of duplicating obligations for reporting and the provision of information; — an assessment of the administrative burden that each new requirement generates, relative to the already existing commitments imposed in the euro introduction process.

Bulgarian business has been a partner of the state throughout the entire path towards our country's admission to the Eurozone. We call on institutions to continue the dialogue and work together with Bulgarian business, not against it.

The proposals in the draft law carry enormous risk for the entire business environment. Bulgaria must have a predictable environment for employers and investors who create jobs and generate the real economy of our country. Such proposals can in the long term harm our country by deterring investors and provoking the closure of jobs.

We believe there is much that can be done to improve the conditions for Bulgarian producers and to reduce inflationary pressure. Urgent reforms are needed to support Bulgarian producers, reduce the budget deficit, combat the grey economy, limit the pressure from monopolies and oligopolies, and further measures that will genuinely bring down the growth of final prices. Only through dialogue between institutions and business and through a balanced and predictable approach will legality, effectiveness and confidence in the regulatory process be ensured.

Yours sincerely,

Bulgarian Entrepreneurial Association (BESCO)

Bulgarian Association of Information Technologies (BAIT)

Bulgarian Employer Association for Innovative Technologies (BEAIT)

Association for Innovation, Business Services and Technologies in Bulgaria (AIBEST)

IAB Bulgaria

Endeavor Bulgaria

Bulgarian-Romanian Chamber of Commerce