We are contacted at regular intervals by people, mostly of Turkish origin, whom the Bulgarian border authorities confiscated cash or precious metals (mostly gold) when they arrive at or leave Bulgaria. This was because they failed to declare these cash or precious metals before the Bulgarian customs authorities. The purpose of this article is to explain the conditions to be fulfilled for the import and export of cash and precious metals across the border of the Republic of Bulgaria, the existing obligations for cross-border transfers and penalties for non-compliance under the applicable Bulgarian legislation.
I. Applicable legislation
Currently, cross-border transfers of cash and precious metals are generally regulated by the Bulgarian Currency Act, which came into force on 01.01.2000 and whose last changes were published in “State Gazette” No. 103 of 28.12.2017. In addition to the legal regulation of this procedure, Regulation No N-1 of 01.02.2012 on the cross-border transfer of cash, precious metals, jewelries and products and the resulting cross-border transfer of goods and the management of the customs registers provided for under Article 10a, has been in force since 01.01.2013.
The first step is to look at the procedure for transferring of cash and then the procedure for the transfer of precious metals, since in both cases certain specifications shall be taken into consideration.
II. Cross-border transfer of funds
Paragraph 1, item 6 of the Additional Provisions of the Currency Act provides legal definition for cash:
- all banknotes and coins, irrespective of the currency, which are in circulation as valid payment instruments;
- all bearer payment instruments, including checks, promissory notes, bills of exchange and other payment instruments that must be issued to a holder.
Under Paragraph 1, item 11 of the Currency Act, natural persons may bring cash across the Bulgarian border, considering the applicable restrictions thereto. First of all, under Article 11. item 2, carrying cash in post parcels is forbidden, except for parcels with declared value.
Furthermore, there is a distinction between border crossings to third countries that are not EU Member States and border crossing to EU Member States.
- When crossing the border into and from a Member State of the EU, all the cash amounting to € 10,000 or more shall be declared just in case the customs officials require this. It is important to note here that, in case of reasonable suspicion or disclosure of unlawful acts in connection with the transfer of cash amounting to less than € 10,000 or its equivalent in BGN or any other currency, the customs officials are entitled to control the natural persons by conducting an inspection about these funds. This involves cash amounting to less than € 10,000, with one of the conditions for customs control - reasonable suspicion or information about unlawful acts.
- Border crossing to or from third countries - in this case, in contrast to the cases above, all the cash, amounting to € 10,000 or more shall be declared before the customs authorities. An inspection is also allowed due to reasonable suspicion or disclosure of illegal acts by customs authorities. Since 01.01.2018 new amendments in the Act came into force, having obliged persons who carry funds from BGN 30,000 or its equivalent in another currency when crossing the border to or from third countries, to present a tax clearance certificate, issued by the competent tax authorities. Foreign natural persons may, according to the law, export funds from BGN 30,000 or the equivalent in another currency from Bulgaria to a third country without a certificate issued by the NRA, only by notification at the Bulgarian Customs, but in this case they should submit a declaration regarding the nature and value of such cash before the customs authorities of their last entry into Bulgari. The important restriction is that the value of the cash must not exceed the amount declared at the last entry.
Sanctions in the event of non-compliance - if a certificate issued by the NRA is not provided or if the certificate presented contains information on outstanding tax liabilities, the customs officials will not allow the funds to be exported. With regard to the obligation for declaring the above facts, it should be noted that the refusal for declaring them, as well as declaring them incorrect or incomplete therein constitutes a breach of the law. Failure to fulfill this obligation may be penalized by customs officials by withholding or confiscation of undeclared cash and fines between BGN 1,000 to BGN 3,000 for natural persons and between BGN 2,000 to BGN 6,000 for legal entities and sole traders.
III. Import and export of precious metals
For the purposes of Paragraph 1, item 1 of the Additional Provisions of the Currency Act provides legal definition for precious metals and gold, silver and platinum, raw or ground. Pursuant to Article 14, item of the Currency Act, individuals are entitled to transfer unlimited quantities of precious metals across the national border, in case they declare them before the customs authorities.
The obligation for declaring them applies for precious metals, jewelries and products containing such metals over the following quantities:
- 37 g of raw and semi-finished gold and platinum and coins, regardless of their gold or platinum content;
- 60 g of jewelry made of gold or platinum alloys, regardless of the gold or platinum content;
- 300 g of raw or semi-finished silver and coins, and silver-alloy jewelry and articles of jewelry, regardless of their silver content;
- jewelries, used in the products listed above;
Precious metals below the indicated quantities are not subject to declaration. If the limits get exceeded, the metals will be subject to declaration in compliance with the rules, applicable to the cash - when crossing the border to or from an EU Member State, the quantity shall be reported to the customs official upon request and in all cases shall be reported when crossing the border to or from a third country.
Penalties for non-compliance - non-compliance leads to the same penalties as for the transfer of cash - withholding and confiscation of precious metals, jewelries and products, including such products produced from them and fines between BGN 1,000 and BGN 3,000 for natural persons and between BGN 2,000 to BGN 6,000 for legal entities and sole traders. The refusal for declaring them, as well as declaring them incorrect or incomplete therein constitutes a breach of the law.
IV. Procedure for declaration of cash and precious metals
In order to avoid heavy sanctions for the violation of the obligation for declaring, the individuals are obliged to comply with the applicable law provisions and timely to declare the above funds. They shall submit a declaration before the customs authorities, on the basis of a template, which can be downloaded from the website of the Bulgarian Customs Agency and which is translated in Bulgarian, English, German and French. It is important to get noted, that this declaration shall be filled in three identical copies - one copy for the declarer and two copies for the customs authorities. The above-mentioned certificate issued by the NEA must be attached to the customs declaration and is considered to be an integral part of it. People who are obliged to fill in the declaration are those individuals who transport cash or precious metals across the border, whether or not they are their property. For individuals under the age of 16 the declaring shall be done by one of their legal representatives. The declaration shall be completed before the relevant customs office when leaving the territory of an EU Member State and handed over to the customs official. If there are two passages - green and red - the declaration shall be submitted at the "red passage".
Should natural persons carry cash, precious metals, jewelries and products which include such metals or are produced from them and they are not subject to such obligation for declaring, they will go through the green passage ("Nothing to declare") or give verbal confirmation at the customs office where there are no separate passages. Should the funds, precious metals, jewelries and products, which include such metals or are produced from them be subject to declaration and the person has passed through the green passage ("Nothing to declare") or has verbally reported this at the time of transfer at the customs office, this shall be considered as declaring of incorrect information.
V. Legal procedure
The Act provides for various mechanisms for protection of individuals, accused of an infringement relating to the unlawful cross-border transfer of cash and precious metals. It should be noted here that customs officials shall comply with a strict procedure after the administrative offense has been detected. The procedure involves a number of important steps to be taken by the accused in the context of a further appeal against a penalty notice issued for the administrative offense.
First of all, at the most, it is necessary to be issued an act for establishing the administrative offense in compliance with the provisions of the Administrative Offenses and Penalties Act. This act is issued in the presence of the person concerned and witnesses who have attended the infringement or the discovery of the administrative offense. Here are two important features to consider. First of all, the refusal to sign this act by the person concerned does not interrupt the procedure - Article 43, item 2 of the Administrative Offences and Penalties Act. His refusal to sign the act could be overcome through the signature of a witness and the proceedings are continued. Secondly, it should be noted that customs officials confiscate money and jewelries at this time according to Article 20, Section 1 of the Currency Act. However, this applies only in cases of offenses by crossing borders to or from third countries and does not for transfers of goods to or from EU Member States. The confiscation of these items takes place in compliance with a prescribed procedure, as it can only be executed for the reasons listed below.
Since the issuing of the act for establishing of the administrative offence person named therein may file objections both at the time of signing the act and within three days after that. The act shall then be sent to the sanctioning authority within a period of two weeks together with all the written explanations and objections. Here is an important procedural principle for foreign nationals - according to case law, for persons who do not speak Bulgarian, an interpreter/ translator at the beginning of the procedure should be appointed, should this not happen - their right to legal protection is violated:
"The respective administrative authority is obliged to appoint an interpreter/translator and shall get ensured that the person concerned understands the content of the act against him and has been informed of their rights, resulting of the penalty proceedings initiated against him. The right of the offender to use translation services is irrevocable. The appointment of an interpreter/translator could be waived only in the case of the express and duly given consent of the person concerned. If a proper translation of the notice is not available, it is assumed that the person concerned could not take note of the content, which in turn constitutes a substantial procedural violation and the person concerned cannot be held liable." (Court decision Number 16 from 02.04.2018 of the Slivnitsa District Court in administrative case Number 714/2017)
The sanctioning authority is obliged to issue an act within one month of receiving the notice. The process can take the following two directions:
If the authority decides that there has been an administrative violation and the identity of the person concerned and his or her guilt have been undisputed, a fine will be issued, imposed on the person concerned. An appeal may be brought against this fine in two courts - before the district court in whose area of jurisdiction the infringement has taken place or has been brought to pass and before the administrative court as an appeal authority.
- If the authority decides that the action does not constitute an offence, the person concerned is not the person named in the act or the fault cannot be attributed to him, the proceedings are being cancelled through a resolution and the release of the confiscated goods is being ordered. As a result, individuals have the opportunity to defend themselves before the issuing of a fine and request the release of confiscated items. An objection has to be filed against the following:
- the fact of the infringement – i.e. here it is to be argued that in the specific case no violation took place;
-the identity of the person concerned - i.e. it should be argued that although there is an infringement in the specific case, the person referred to in the notice is not the actual violator;
- the fault cannot be assigned - i.e. It must be argued here that the subjective criterion is missing, i.e. the person could not understand the nature and meaning of his actions at the time of the border crossing and was in a state of insanity.
The procedure may be stopped at this stage only for these three reasons and the collected items shall be returned.
There were cases in the case-law of unjustified arrests for which the fulfillment of the offense did not exist. An example of this is Decision No. 3997 from 30.05.2016 of the Sofia District Court on administrative case No. 10684/2015, which states that:
"The case was undisputed in the fact that the appellant entered the "green passage" and was arrested by the customs authorities after the entering. The court assumes that, from an objective point of view, the appellant did not fulfill the administrative offense under Art. 11a (1) of the Currency Act. In that case, the complainant should have had to go through the entire green passage entitled 'Nothing to declare' and to objectify his refusal to register in accordance with Article 8 (3) of Regulation No N-1 / 01.02.2012. During the presence of the person on the premises of the customs office at the Sofia airport it was actually possible for him to register the currency carried. Entering the so called "Green passage" does not exclude the possibility for the person to reverse and to register the currency before the customs authorities. In this sense, it shall be assumed that the will not to declare is expressly stated only when leaving the customs office. Only then it could be established that this act constitutes an administrative offense under Article 11 (1) of the Currency Act."
In other decisions, it is assumed that the declaration could can be executed not only by a written notice, since an oral report is also admissible: "It was proven, that at first opportunity the appellant declared the currency, brought by him, orally before two witnesses – the two customs employees, but no written declaration has been made available to him, and thus he couldn’t file it. Moreover both witnesses did not deny at the hearing that they did not provide the complainant with the declaration, which the appellant could have filed, quite the contrary, they both did not know themselves where these declarations would be found and brought. Furthermore, it is a duty of the customs office to hand these declarations over to the applicants, since they themselves are not required to carry them. In this situation and in accordance with the facts previously adopted, it must be assumed that the administrative offense to which the person concerned is accused of through the penalty act, is not present. It also lacks part of the objective side that he has failed to act or provide inaccurate information about the currency he has carried, as it has been established from the evidence that the appellant had verbally reported his currency at the first opportunity he had and the amount corresponds to the amount, actually carried by him and, as he has not been given a written declaration form, he has not completed such and thus cannot clearly be held liable."(Decision from 17.04.2018 of the Svilengrad District Court in the administrative case No.126/2018).
Considering the above it can be concluded that the law in generally provides sufficiently firm guarantees of legal protection both in the proceedings prior to the issuing of the penalty act and thereafter - in the process of its appealing before the relevant court.