President Radev Vetoes Investment Promotion Act Amendments

President Rumen Radev on November 5 returned to Parliament for further debate the Law Amending the Investment Promotion Act, adopted on 24 October this year.

The law introduces special conditions for the disposal of immovable property, certain movable property, and corporate shares and equity held by four companies controlled by Lukoil. Under the amendments, such transactions may be carried out only following a decision of the Council of Ministers, which itself would depend on a positive opinion from the State Agency for National Security (SANS).

In his veto reasoning, the President argues that the law places the Council of Ministers in a functional and operational dependency on SANS, which is constitutionally impermissible. The Council of Ministers is the competent authority responsible for directing and implementing the internal and foreign policy of the state and ensuring public order and national security. SANS, on the other hand, is a specialised body subordinate to the Council of Ministers and cannot, through its opinions, oblige the government to adopt specific decisions. Otherwise, a situation would arise in which the Council of Ministers would be unable to exercise its constitutional powers independently. This, the President notes, is incompatible with the logic underpinning the functioning of the executive branch.

Furthermore, the sixth chapter of the Investment Promotion Act already provides a procedure for screening foreign investments that may pose a potential threat to national security. This procedure takes into account not only the opinion of DANS on proposed transactions, but also the views of the State Intelligence Agency and a number of other state bodies.

The imposition of additional conditions for specific companies is also not in line with European Union law, and contravenes both the letter and the spirit of the Law on Normative Acts, the President states.