Bulgaria to introduce quasi-criminal corporate liability for legal entities

In a sweeping legislative overhaul, Bulgaria is redefining the framework governing corporate liability for criminal offences

The reform package – encompassing amendments to the Bulgarian Criminal Code, the Bulgarian Criminal Procedure Code (CPC) and most notably the Bulgarian Administrative Violations and Sanctions Act (AVSA) – marks a pivotal shift in the prosecution and sanctioning of corporate misconduct.

Although the legislative changes were officially promulgated on 29 July 2025, their practical application is staggered. The core provisions affecting corporate liability and procedural mechanisms will take effect on 31 October 2025.

Quasi-criminal liability for legal entities under the Bulgarian Administrative Violations and Sanctions Act and the Bulgarian Criminal Procedure Code

Bulgaria was among the last European jurisdictions to introduce corporate criminal liability, largely due to historical and academic factors. Traditionally, Bulgarian criminal law has been grounded in the concept of guilt, which implies personal liability and applies only to natural persons. In line with EU legislation and, most importantly, in view of the country’s efforts to join the OECD, Bulgaria has now adopted substantial amendments to its legislation creating an enhanced regime of administrative liability, which is to be enforced by prosecutors and courts in the scope of criminal proceedings. This, in practice, results in the implementation of quasi-criminal corporate liability under Bulgarian law – or in other words, enhanced administrative liability enforced via criminal procedural mechanisms. Similar systems have been implemented in other EU member states, such as Germany, where administrative fines may be imposed on legal entities through criminal procedure rules.

At the heart of the reform in the quasi-criminal corporate liability framework is the comprehensive re-shaping of Articles 83a–83d of the Administrative Violations and Sanctions Act (AVSA), which establishes a parallel venue for initiating proceedings against companies – complementing the procedural innovations introduced under the CPC. Although such liability existed in theory already, it has now been significantly extended and appropriate procedural means have been introduced for it to be implemented.

Wide list of relevant crimes

The new regime of quasi-criminal corporate liability extends to a list of offences which currently covers most criminal offences potentially relevant for legal entities. Among these are corruption and private bribery, money laundering, breaches of intellectual property rights, computer crimes, various types of fraud, insolvency related offences, customs breaches, financial crimes, breaches related to EU funds, tax related offences, sports-related offences, organised crime, environmental offences, drug-related offences, etc.

Extensive scope

Quasi-criminal corporate liability may be incurred by legal entities not only through the actions of their managers and employees, but also through agents or other individuals who have been assigned specific tasks by the entity.

No need for prior criminal conviction of individuals

Under the envisaged regime, a final conviction of an individual is not required to initiate proceedings against a company. Companies could be sanctioned even if no criminal case is opened against the individuals. Sanctions may also apply if the criminal case is stayed or terminated, if a plea agreement is reached without the Company’s involvement or if a final conviction is issued without the company being part of the proceedings. This flexibility could help avoid the bottlenecks seen in jurisdictions like Poland and Bulgaria to date, where corporate liability is contingent on prior individual convictions.

Significant sanctions

Sanctions under the new regime are scaled and tiered. Where a company is liable because an individual has committed a listed offence “for the benefit” of the company (Art. 83a(1)), the fine depends on the value of the unlawful benefit and can reach up to BGN 10,000,000 (approx. EUR 5.1 million). Where the benefit exceeds that amount, the sanction equals the higher of the benefit’s value or 5% of the company’s prior-year turnover. If the benefit is non-pecuniary or unquantified, the court may impose a fine ranging from BGN 5,000 (approx. EUR 2,500) to 5,000,000 (approx. EUR 2.5 million), but not less than 5% of prior-year turnover.

In addition to fines, courts may impose ancillary measures for one to three years, such as temporary debarment from public procurement, concessions or access to EU funds/subsidies and public announcement of the decision.

Furthermore, assets of the entity used to perpetrate the offence, as well as proceeds from the offence, may be subject to confiscation.

Compliance defence not yet developed

Bulgarian legislation does not formally recognise a “compliance defence”, unlike many other EU jurisdictions, such as the Czech Republic. Nevertheless, a newly introduced provision concerning the criteria for determining sanctions implicitly encourages companies to adopt effective compliance systems, as such systems – and cooperation with authorities – may mitigate sanctions or influence prosecutorial discretion.

While no statutory exemption exists, compliance programmes remain strategically valuable. They can demonstrate good faith and proactive risk management, may reduce reputational damage and could influence the severity of ancillary measures (e.g. public procurement bans).

Liability and sanctions to be established within criminal proceedings

The core element of the reform, aimed at ensuring the practical applicability of the new regime, is the obligation for prosecutors and courts to involve relevant legal entities when offences that could give rise to corporate liability are considered. This measure is expected to encourage prosecutors to include legal entities in proceedings.

The reform expands the circumstances under which proceedings against a company may be initiated. A prosecutor may propose sanctions even if no criminal case can be opened or if it has been stayed or terminated, where a case was resolved by plea agreement without the company’s consent or even after a final conviction if the company was never brought into the proceedings.

The reform also clarifies cross-border reach (i.e. extraterritorial jurisdiction): Bulgarian authorities may act when a Bulgarian company benefits from crimes committed abroad and vice versa when a foreign company benefits from crimes committed in Bulgaria. However, proceedings will not be initiated if the company has already been sanctioned abroad for being enriched by the offence.

Proceedings conclude with a judgment either imposing or declining to impose a sanction on the company. In addition to pecuniary sanctions, the court may impose: (i) a temporary prohibition from participating in public procurement procedures; (ii) a temporary ban on involvement in concession procedures; (iii) a temporary restriction on accessing European Union funding opportunities; (iv) a temporary suspension from receiving subsidies or grants from the EU, the state or municipal budgets and (v) public disclosure of the judgment. The process follows a two-instance model, with the appellate court’s decision being final.

Transparency and publicity

Transparency obligations are strengthened. Final court acts (whether a judgment or verdict) imposing corporate sanctions must be transmitted for publication in the Bulgarian Commercial Register and, where relevant, announced in the Public Procurement Portal and the National Concessions Register. Judgments ordering public announcement must be actioned by the designated third party within three days of entry into force. A transitional rule preserves pending cases initiated under the earlier format (motivated decree), which are to be completed under the previous procedure.

Practical implications for businesses

The implementation of quasi-criminal corporate liability in Bulgaria may significantly affect businesses and existing compliance measures and protocols will need to be adapted accordingly. Although the well-known “compliance defence” recognised in many jurisdictions is not explicitly provided for in Bulgaria, the adopted legislation will still allow and encourage businesses to implement measures aimed at mitigating the risks of criminal breaches.

Wolf Theiss has extensive experience in Bulgaria and across the CEE region in assisting and supporting clients in the above efforts.

*This Client Alert is for general information only and does not constitute legal advice. For tailored guidance, please contact our Wolf Theiss White Collar, Investigations & Compliance team.