Advocates General at the Court of Justice of the EU: BNB Deputy Governor May Hold Company Interests if Control Mechanisms Exist

One of the Advocates General at the Court of Justice of the European Union, Nicholas Emilio, has issued an opinion on the case brought by Andrey Gyurov (currently caretaker Prime Minister of Bulgaria) against the decision of the Bulgarian National Bank’s Governing Council to remove him from office (as Deputy Governor and member of the BNB Governing Council).

Four main conclusions are outlined in the opinion. The first is that European Union law allows national legislation in a given country to provide for that a deputy governor should declare their interests in commercial companies, as is the case with Andrey Gyurov.

According to the second conclusion, a certain article of the Statute of the European System of Central Banks and of the European Central Bank (ECB) concerning early relief applies only to governors of the respective national central banks. However, this does not mean that similar provisions for early relief cannot be introduced in national legislation for deputy governors.

The third conclusion is that Union law allows deputy governors of a national central bank to hold a shareholding in a commercial company. However, this is only possible if the national legislation has provided for a control mechanism to ascertain whether there is a conflict of interest that would lead to a breach of the bank's independence and credibility.

“When such a conflict is identified and can be remedied within a specified period following appointment, failure to fulfil that obligation within that period may lead to the conclusion that the individual concerned no longer meets the requirements for holding office, provided that the period is appropriate and the starting point from which it runs is clearly defined,” the opinion of Nicholas Emilio states.

EU law also allows for the introduction of a prohibition on a deputy governor participating in the governing body of a non-profit legal entity without prior authorisation. A period may be granted within which such an irregularity can be remedied.

According to the fourth conclusion of the Advocate General, it is crucial that the authority responsible for establishing grounds for removal from office also has the power to assess whether a serious breach has occurred within the meaning of the Statute of the European System of Central Banks and of the European Central Bank (ECB).

Nicholas Emilio also recalls the factual background that led to the case.

On 26 July 2023, Andrey Gyurov was elected by the National Assembly as Deputy Governor of the Bulgarian National Bank (BNB) and head of the Issue Department (one of the three main departments of the BNB).

Under Bulgarian law, members of the BNB’s governing bodies are required to submit two types of declarations: a declaration of incompatibility (filed with the authority that elects or appoints them – in this case, the National Assembly) and a declaration of assets and interests (filed with the Commission for Counteracting Corruption. These declarations are intended to rule out potential conflicts of interest that could undermine the bank’s independence.

On 27 July 2023, Andrey Gyurov submitted a declaration of incompatibility to the National Assembly, stating that at the time he held a 2% share in the limited liability company Yontech Engineering Ltd, valued at 117,000 leva (approximately €58,500).

On 11 August 2023, Andrey Gyurov filed an initial declaration of assets and interests with the Commission for Counteracting Corruption, again disclosing his participation in Yontech Engineering.

In November of the same year, Andrey Gyurov sold his stake in Yontech Engineering for the sum of 100 leva (approximately €50), with the transaction recorded in the Commercial Register on 23 November 2023.

In parallel, on 13 November 2023, Andrey Gyurov submitted an additional declaration to the Commission for Counteracting Corruption, stating that he was a member of the governing boards of two non-profit legal entities – the Balkan-Panitsa Institute for Scientific Research and the Golf Club Blagoevgrad.

On 7 February 2024, Andrey Gyurov filed a third declaration of assets and interests with the Commission for Counteracting Corruption. He specifically stated that, as of the date of his election or appointment, he did not hold any shareholding in commercial companies and was not a member of the management or supervisory bodies of non-profit legal entities or cooperatives. He also declared that in the 12 months preceding his election or appointment, he had no participation in commercial companies.

On 24 June 2024, following a detailed review, the Commission for Counteracting Corruption found an incompatibility between Andrey Gyurov’s position as Deputy Governor of the Bulgarian National Bank (BNB) and head of the Issue Department, and two of his external activities: (1) his shareholding in Yontech Engineering Ltd, and (2) his membership on the governing boards of the aforementioned non-profit legal entities, without explicit authorisation from the BNB Governing Council. The Commission for Counteracting Corruption notified both the BNB and the National Assembly of its decision.

Bulgaria's central bank management decided to early relieve Andrey Gyurov as Deputy Governor

Following receipt of the Commission for Counteracting Corruption’s notice, the BNB Governing Council adopted a decision establishing grounds for the removal of Andrey Gyurov from his positions as Deputy Governor and head of the Issue Department. Specifically, taking into account the Commission for Counteracting Corruption’s findings, the Governing Council concluded that Gyurov did not meet the requirements necessary to fulfil his duties.

Although it considered that this finding alone constituted sufficient grounds for early removal from office, it also accepted that the same conduct amounted to a serious breach.

Andrey Gyurov ceased exercising his powers as Deputy Governor and member of the BNB Governing Council from the date of the BNB decision. He appealed the decision before the Supreme Administrative Court (SAC), which rejected his request to suspend the implementation of the BNB ruling. The SAC then stayed the proceedings and referred the matter to the Court of Justice of the European Union.

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