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IV. ARMS TRADE PRACTICES

National Arms Trade Controls
Bulgaria’s arms trade—in theory at least—is governed by a strict set of legal regulations. Since November 1995 the country’s arms trade control law has outlined a dual licensing procedure for international arms transactions.117 First, Bulgarian law requires firms to gain authorization to participate in the arms trade.118 Licenses to trade in arms are issued by the Interministerial Council on Defense Industry and Logistics at the Council of Ministers, a cabinet-level body that is broadly responsible for developing Bulgaria’s national arms trade policy. (A second body, described below, issues permits for individual arms transactions.)

The deputy prime minister, who is also the industry minister, chairs the Interministerial Council. The permanent members of council include the deputy ministers of trade, industry, defense, foreign affairs, finance, interior, transport, development, and education and science, as well as the deputy head of the general staff of the Bulgarian army and the director of Bulgaria’s intelligence service. The prime minister appoints a secretary to the Interministerial Council. In addition, three advisors serve the committee, but do not vote.119

The council meets on a monthly basis to review license applications or undertake other matters of concern. It considers applications on a case-by-case basis and makes decisions based on the vote of the majority. The chair does not exercise veto power. Arms trading licenses are granted for periods not longer than one year, and are then subject to renewal.120 Several officials responsible for arms export controls stated that they had never revoked the arms trading license of a company, although it they may have postponed decision on an application or allowed licenses to expire in some cases.121 The council secretary explained that licenses would be denied if the interior ministry, army security services, or the national intelligence services voiced objections to a company’s application, if there wasevidence that a company had been involved in misconduct, or if the company was suspected of involvement in dubious transactions.122

Authorized arms trading firms must also obtain a permit for each individual arms export transaction,123 as is also the case for the Ministry of Defense when it arranges to directly sell surplus military equipment.124 The application process is the same for commercial and government-to-government sales: export permits are issued by a commission under the Trade Ministry, known as the Commission for Control of Foreign Trade Transactions with Arms and Dual-Use Goods and Technologies. This commission is chaired by the trade minister and includes, in addition, one representative each from the ministries of trade, foreign affairs, industry, interior, and defense, as well two secretaries, one of whom specializes in arms export controls. (The other secretary is responsible for the activities of the commission with respect to the export of dual-use goods.) Three persons—the deputy ministers of trade, foreign affairs, and interior—serve on both the Interministerial Council and the trade ministry’s Commission for Control.125

Applications for individual arms export permits presented to the trade ministry must include documentation about the proposed sale. As in many countries, firms must provide their arms trading licenses and an end-user certificate identifying the ultimate purchaser, as well as documentation showing that the purchaser is authorized to import arms.126 The trade ministry commission is responsible for reviewing each application and deciding whether to authorize the deal. When it chooses to authorize an arms export deal, the commission notifies the Interministerial Council, the General Customs Directorate, and the Ministry of Internal Affairs of its decision. If it cannot reach consensus on an application, it refers the case to the Interministerial Council for decision.127

Under the arms trade law, the commission may deny or revoke arms export permits, which are valid for not longer than 180 days, under certain circumstances, including if the export violates Bulgarian law, harms state interests, contravenes international commitments or legal requirements, is based on a false or incomplete application, or deviates significantly from the terms of transfer under which it was approved. According to members of the Trade Ministry commission, applications for exports to certain countries—those subject to U.N. or E.U. embargoes—areautomatically denied, as are applications about which they have strong suspicions that an illegal diversion of weapons may be planned.128 In addition, a government official indicated that permits are denied when the end-user certificate is not issued by a government body.129 Denials of export permits may be appealed to the Interministerial Council.130

The same dual-licensing procedure governs the actual shipment of weapons. Transport companies, including airlines such as Air Sofia, must first apply to the Interministerial Council for a license to transport weapons. For each individual arms transport transaction, they must obtain a transport permit from the Trade Ministry commission.131 The Trade Ministry commission grants these permits on the basis of an application and related documentation, including the end-user certificate and the arms trading license of the petitioning company. As with an approved deal for the export of arms, the Trade Ministry informs the Interministerial Council, customs authorities, and the Interior Ministry that a permit has been granted. For arms transport transactions, the Interior Ministry issues a police permit for the transit of weapons from the point of storage to the designated point of export. Arms deals must also conform to customs regulations. For example, shipments of weapons must be declared as such on cargo manifests.

Violations of arms trade control laws are subject to penalties. Under the arms trade law enacted in 1995, license applicants—both trading and transport companies—and authorized end-users are subject to fines or property sanctions for failure to observe the terms under which the license was issued. The law calls for a maximum prison sentence of eight years and a maximum fine of U.S.$600 for unauthorized arms trade activity, with lower penalties available for less serious violations.132

The Bulgarian government has responded to international concern over the country’s continued involvement in questionable arms exports by seeking to adjust its arms trade laws.133 For example, it modified the national list of arms and dual-use items subject to regulatory control to conform to international standards.134 More importantly, the cabinet approved in December 1998 a set of draft amendments to tighten the arms trade control law, and in January 1999 Bulgarian authorities began consultations with foreign officials regarding the proposed change. As of March 1999, the parliament had not considered the draft legislation.

If passed by parliament, the draft amendments would modify the existing arms trade control legislation and amend arms trade regulations, as well as introduce changes to the criminal code.135 In particular, the proposed changes wouldstrengthen criminal penalties for violations of export controls, raising prison sentences as well as fines.136 The draft changes would also more closely control arms brokering activities by requiring each arms trading company seeking an arms export permit to identify the names of intermediaries authorized to represent the parties involved in the proposed transaction and by explicitly defining arms brokering activities.137 In addition, the amendments also would permit foreign-owned companies registered in Bulgaria to participate in arms trading activities, and would increase the minimum capital requirement for trading and transport companies engaged in arms transactions. The proposals would also align Bulgaria’s legal framework more closely with its international arms trade obligations (see below).

International Arms Trade Controls
Beyond its national legal arms trade regulations, Bulgaria is party to several international commitments that limit its arms dealing. Like all governments, Bulgaria is legally bound to respect United Nations Security Council resolutions, including those imposing arms embargoes. The arms trade law enacted in 1995 does not explicitly bar arms transactions that violate U.N. arms embargoes, but successive governments have asserted that they adhere to U.N. embargoes as a matter of policy. Bulgaria reportedly has enacted decrees on an ad hoc basis to implement U.N. arms embargoes,138 but it does not have a practice of formally notifying arms trading companies of the countries subject to U.N. embargoes.139

Bulgaria is a member of the Wassenaar Arrangement (WA), which regulates the export of conventional weapons and dual-use goods to countries where such sales could prove destabilizing and provides mechanisms for countries to share information about arms deals.140 The WA operates by consensus, and members have agreed not to sell weapons to Iran, Iraq, Libya, and North Korea. Since joining the WA in July 1996 Bulgaria has made regular declarations to the Wassenaar Secretariat, but it does not automatically share information about rejected arms deals.141

Bulgaria also formally subscribes to the 1993 criteria on arms exports of the Organization for Security and Cooperation in Europe (OSCE), which call for transparency and restraint in arms transfers.142 As an OSCE member, it is further expected to respect OSCE arms embargoes.143

In August 1998 Bulgaria declared its commitment to the principles outlined in the nonbinding European Union’s Code of Conduct on Arms Exports.144 The E.U. code, adopted in June 1998, outlines a set of principles and calls on states to limit weapons exports under a variety of circumstances, including sales to armed forces that abuse human rights, to regions embroiled in violent conflict, or to countries suspected of reexporting the weapons.145 The code also calls on each E.U. member government to report annually on arms exports and implementation of the code, to inform other participants of deals that it rejects, and to consult with other E.U. member governments before taking part in arms deals that they have rejected.146

The legislative changes proposed by the Council of Ministers in late 1998 would formalize Bulgaria’s obligations to adhere to certain international arms trade restrictions. In particular, they make observance of U.N. Security Council decisions mandatory, and they introduce into law a provision stating that restrictions derived from international agreements and from Bulgaria’s membership in international organizations, including its participation in international arms export control regimes, are binding, as are restrictions arising from Bulgaria’s pledges to join the decisions of international organizations of which it is not a full member. In addition, the draft legislation would introduce a provision giving the government the option to ban arms deals when the weapons are destined to “a state on whose territory there are military operations or which takes part in armed conflicts.”

Policy Gaps
Although national arms export regulations are in place and Bulgaria has repeatedly affirmed its commitment to abide by international arms trade standards, in three key areas Bulgaria’s arms trade control policy fails to address fully the existing problems in the arms trade. These oversights help account for Bulgaria’s continued involvement in questionable arms transactions.

Lack of Attention to Human Rights and Humanitarian Considerations
Bulgarian’s arms trade control laws ignore the human rights and humanitarian impact of the use of the weapons the country licenses for export or transport. Armed forces that have been responsible for gross human rights abuses and violations of international humanitarian law can legally purchase weapons from Bulgaria. No provision exists restricting arms deal on the basis of human rights concerns, even if it is likely that the weapons will be used to commit atrocities, nor does the law allow Bulgarian officials the option to deny an application on human rights grounds alone. The draft amendments proposed by cabinet, described above, improve upon existing law to a very limited degree by permitting the government to introduce on an ad hoc basis restrictions on arms transactions with countries engagedin armed conflict. This provision, as proposed, does not address arms deals with countries that are preparing for war or are committed to a formal peace process. In addition, the new restriction does not address the human rights record of the armed force in question, only whether it is engaged in armed hostilities at the time the arms trade application is submitted.

This absence of explicit human rights and humanitarian considerations suggests that the draft arms trade control laws are part of a politically-driven strategy to show that Bulgaria adheres to Western standards, rather than a reflection of concern for the victims of abuses or an awareness that the country bears a measure of responsibility for the uses to which the weapons it sells are put. Indeed, none of the government officials with whom Human Rights Watch met expressed concern about abuses committed with Bulgarian-supplied arms.

Poor Adherence to International Commitments
Bulgaria has not incorporated its international arms trade commitments into domestic legislation. Its commitments—
including its binding obligation to observe U.N. arms embargoes—are incorporated into law only by virtue of a provision that gives the government the option to introduce restrictions on arms sales to comply with international obligations. In addition, Bulgaria has thus far adopted a minimalist interpretation of its commitments under the nonbinding E.U. Code of Conduct. According to officials, no export permits have been denied since it joined the code.147 To the contrary, arms deals to areas of violent conflict, such as the Horn of Africa, and to countries believed to reexport weapons, such as Uganda, have been approved since mid-1998, in contravention of provisions of the code.

Similarly, Bulgaria has done little to adhere to the spirit of the Wassenaar Arrangement. Bulgaria continues to sell weapons to conflict-plagued areas in Africa. These sales are not explicitly barred under the agreement, but contravene requests that members show “maximum restraint” in their arms transfers.148

Proposed legislative changes will address this problem, but only incompletely. The draft legislation provides a framework within which Bulgaria must abide by its international obligations, but it does not specify which restrictions are adopted, nor does it explicitly incorporate into national legislation the international commitments that Bulgaria has declared. For example, it is not apparent if—under the proposed changes—Bulgaria would adhere formally to all the provisions of the E.U. Code of Conduct, which include adherence to OSCE and E.U. arms embargoes, and the OSCE arms transfer criteria. In fact, the only clear ban imposed under the draft legislation that is derived from international commitments is the restriction on arms transactions that violate decisions of the U.N. Security Council.

Narrow Focus Ignores Unauthorized Retransfers
Bulgaria also views its responsibilities narrowly with regard to the retransfer of weapons it authorizes for export or transport. For example, Bulgaria’s trade minister asserted confidently in 1998 that “it is impossible for illegal arms exports to occur in Bulgaria” given official licensing requirements.149 This statement ignores the prominence of deals in which authorized arms exports are diverted to unauthorized end users. Reflecting a similar attitude, a Trade Ministry spokesperson responded to charges of Bulgarian involvement in illicit weapons deals by stating that Bulgaria “cannot be held responsible” when arms legally sold to other countries are then resold,”150 adding that “[i]f indeed there are cases of reexport of Bulgarian arms, the responsibility rests entirely with the country named as consignee”in the application.151 Bulgaria’s defense minister declared, moreover, in March 1999 that Bulgarian laws require an end-user certificate before an arms export is approved, but that once a shipment leaves Bulgaria, “we don’t know what happens afterwards.”152

By this explanation, Bulgaria today is posing as the dupe of others, including arms brokers who negotiate deals for unauthorized clients through third-country intermediaries, or client governments that resell Bulgarian arms in violation of an end-user certificate. Such a defense of Bulgaria’s role in questionable arms exports implies several dubious assertions. First, it falsely suggests that Bulgarian arms exports based on falsified documents, misrepresentation, or illegal intentions constitute entirely legal transactions. In fact, arms deals that are licensed but are then diverted to unauthorized clients must be considered “gray market” arms deals. Second, it implies that Bulgaria in all cases makes a good-faith and vigorous effort to enforce its regulations by carefully reviewing deals before approving them—including the scrutiny of the retransfer record of the purchaser identified by documents—and by monitoring arms deliveries and verifying compliance after arms have been exported. While Bulgaria has worked to improve enforcement under the current government, control continues to be incomplete (see Problems of Enforcement, below). Third, it suggests that the Bulgarian government bears no responsibility when arms industry and regulatory officials—whether through complicity, corruption, incompetence, or lack of resources—actively facilitate or passively permit arms transactions destined to unauthorized clients. A journalist who has interviewed Bulgarian arms traders noted that arms transactions intended for unauthorized clients are often arranged in compliance with the letter of the law, but that the traders were often aware that the weapons were to be rerouted or reexported. He said that Bulgarian arms dealers had explained that such deals were arranged on the basis of personal contacts and understandings, and that deals to clients considered particularly unsavory earned much higher commissions. He further noted that false documents provided the Bulgarian intermediaries with legal protection, as they could deny foreknowledge of the illicit retransfer of arms shipments they helped broker.153

Denials of Bulgarian involvement in any gray market arms deals and the notion that Bulgaria is not responsible for weapons once they leave its borders serve both to reinforce the practices that allow for illegal diversions and to reduce accountability. The absence of concern reflected in such denials informs regulatory practices that do not adequately monitor the deliveries of authorized exports, and helps shape legislation that does not address Bulgarian involvement in gray market arms transactions.

Problems of Enforcement
Effective regulation of Bulgaria’s arms trade depends upon rigorous enforcement of Bulgarian law and stated policy. Officials of the UDF government have publicly asserted that previous governments exercised poor control over arms transfers,154 but when describing controls under their own government, officials argue that they are doing all that they can under difficult circumstances to regulate arms transfers.

The government has four primary means with which to exercise authority. In particular, it is responsible for overseeing the predominantly state-owned arms industry (including some private trading firms but not manufacturers),licensing companies and transactions, monitoring exports, and punishing violations. In each of these areas, Bulgaria’s controls are inadequate. In addition, effective controls are constrained by broader problems, which include confused lines of authority, corruption, and lack of transparency. Despite these serious constraints, there have been some successes that demonstrate that improvements can be achieved.

Oversight
The government appoints the directors of state-owned arms trading or manufacturing companies, and, according to officials, it uses such appointments to enhance control over the arms trade. In a practice that is common after changes in government, the UDF government replaced the directors of several major arms producing companies shortly after taking office.155 It also later replaced the leaders of the country’s leading arms trade companies in a move that was publicly linked to concerns about arms deals. Specifically, Bulgaria’s ambassador to the United States stated in a letter to the New York Times in mid-1998 that two fired arms trading executives—from Kintex and Teraton—were linked to the former secret police, adding that their removal would help resolve problems with arms export violations.156 In March 1999 that same official declared, referring to these two companies, that “It was the strong determination of the government to turn them from notorious companies to decent ones. We effected changes of directors and management. People had been there for a very long period and some of them were probably connected to the old regime.”157 The chief of the third major arms trading company, Armimex, was also replaced in 1998.158

The government also appoints members of boards of directors or supervisory boards of arms industry companies. The UDF government replaced many of these board members.159 In a pattern that bespeaks the institutional nature of Bulgaria’s arms export control problems, a number of officials responsible for reviewing export applications submitted by arms trading companies simultaneously serve on the boards of those same companies. For example, the secretary of the Interministerial Council heads the supervisory board of Armimex, the senior advisor to the council is chairman of the board of Teraton, and another of the council’s advisors sits on the board of Kintex. For their services to the companies, these officials receive a modest monthly salary (approximately U.S.$40 per month) and stand to receive bonuses if the companies perform well. The officials’ dual responsibilities present a direct conflict of interest, yet one of these officials maintained that serving on arms industry boards helps authorities monitor the activities of the companies they regulate. Likewise, he argued that the appointment of former licensing officials to head arms industry companies—including the naming of the former secretary of the Trade Ministry’s arms export licensing body to serve as the director of Teraton—ensures that companies will strictly adhere to regulations. Highlighting the tension between the goals of the arms trade control bodies and the arms industry, the official statedthat he personally felt that the arms industry must strictly abide by its legal obligations but that he recognized that “this has a negative effect on the military industry.”160

Licensing
As noted above, the Interministerial Council issues arms trading licenses, including to transport companies, and a commission of the Trade Ministry authorizes individual arms transactions. This dual licensing procedure provides an important mechanism by which government authorities control the arms trade. The first stage of the process offers the opportunity to deny authorization to trade in weapons to dubious companies, but such determinations require a thorough investigation. According to one source, the government conducts probes into all companies that petition for an arms trading license using information submitted in the application.161 Officials from the Interministerial Council, however, suggested that such investigations were launched only where there were suspicions about a company.162 Regardless, it is not clear what investigative resources are available for such inquiries, nor what standard of evidence is required to reject an application. Thus far, according to officials, no petitioning company has been denied an arms trading license.163

Some of the most important regulatory weaknesses become apparent at the second stage of the licensing process, the Trade Ministry’s review of individual arms trade applications. One problem is that the review process, while multilayered, is not clearly defined. The secretary to the commission with responsibility for arms deals examines the application, including the documentation, and the commission then considers the application. The members of the commission have access to the documents and also may request that experts within their respective government ministries review the documents. The intelligence services also apparently are active in this review.164

The most important of these documents is the so-called end-user certificate (EUC) which identifies the purchaser and contains a provision guaranteeing that the arms it has ordered will not be retransferred to a third party without prior notification and approval from the exporter, in this case Bulgaria. Several officials interviewed by Human Rights Watch described the difficulty of authenticating documents submitted with applications for arms exports, particularly the EUC. One official noted that arms dealers are increasingly sophisticated, and that EUCs are not always accurate, making it difficult for authorities to differentiate between illicit and legal sales.165 Another official admitted that he was aware that corrupt military officials in other countries would sign end-user certificates for purchases destined to other clients.166 Officials said that, when possible, they verify the EUC by contacting the government that issuedthe document through its diplomatic mission to Bulgaria, which is sometimes located in a neighboring country,167 but they acknowledged that they were not able to verify all end-user certificates prior to issuing an arms trade permit.168

Other officials noted that they are more likely to scrutinize applications if they learn that the country identified as the purchaser has a record of reexporting weapons in violation of end-use agreements.169 According to the same officials, however, the Trade Ministry commission does not maintain a list of countries believed to have been involved in illegal retransfers. According to another official, the Trade Ministry commission will automatically deny an application on the basis of confirmed information that a proposed arms deal will be illegally retransferred, but reasonable suspicions based on a country’s past reexport record are considered insufficient grounds for a denial.170 Highlighting the lack of attention to the retransfer record of potential Bulgarian arms clients, two members of the Interministerial Council were unaware of what would happen if it was discovered that a country had provided a false end-user certificate.171

One official lamented more broadly that the Trade Ministry commission was unable to conduct effective investigations into pending arms deals. He said that this was primarily due to a lack of information and resources, but he also stated that a pending application could not be rejected on the basis of unconfirmed suspicions because the government might then be vulnerable to legal action by the parties to the transaction.172 Such explanations suggest that Bulgaria does not comply with the principles of the E.U. Code of Conduct, which clearly bar arms deals to countries suspected of retransferring weapons (see International Arms Trade Controls, above).

Monitoring
Once an arms export permit has been granted, authorities are tasked with supervising the completion of the transaction. Intelligence and customs officials monitor the movement of weapons across Bulgarian territory, as does the border police. For example, customs regulations stipulate that customs officers must confirm that the goods declared on the application and on the cargo manifest match.

Once a shipment leaves Bulgaria, however, little is done to verify its actual route. The government states that, using one or more of several indirect methods, it attempts to verify that the weapons consignment has been delivered to the authorized location. For example, authorities may inquire with the Ministry of Defense of the purchasing countryto confirm receipt of the arms shipment for which it provided an end-user certificate.173 Bulgarian authorities argue that they lack resources to monitor end-use violations and can do little once a shipment has left Bulgaria.174 Direct physical inspection is prohibitively expensive, particularly as Bulgaria has few overseas embassies or trade missions, and is therefore rarely performed.175 This is particularly true in Africa, which is the destination for a substantial portion of Bulgaria’s arms exports.

These limitations point to the possibility, readily acknowledged by Bulgarian officials, that arms authorized for export may be retransferred to unauthorized end users once they leave Bulgarian soil. A representative from the Foreign Ministry stated that his agency is responsible for tracking the reexport of Bulgarian arms, but that it lacks information and resources with which to carry out its responsibilities. Most of the information it has received about suspected illicit arms trade activities, including suspected retransfers, has been provided by foreign governments, but the official claimed that this information had often proved unreliable. He, like others who admitted that Bulgaria has a low capacity for tracking arms transfers, expressed the need for additional training and technical assistance from other governments. Reflecting an attitude which pervades the Bulgarian government, one official argued that end-use monitoring was “an international problem,” rather than Bulgaria’s responsibility.176

Accountability for Violations
Despite Bulgaria’s long history of involvement in suspicious or troubling arms transfers, none of the officials interviewed in Bulgaria was able to identify any cases in which violations had been prosecuted. The lack of enforcement of legal sanctions deprives the government of an important means by which to constrain arms trade activities.177

Again, officials and observers stated that institutional weaknesses were to blame. In this case, they said that the judiciary, which has responsibility for criminal prosecutions, lacks training and resources with which to perform its function. They noted that there is no effective cooperation between the judiciary and executive branch agencies. In part, this is because the judicial system is poorly regarded, even by others within government. According to aBulgarian minister, the “widespread belief” is that the judiciary “remains clumsy, ineffective, and corrupt.”178 It is therefore not surprising that it is unable to enforce arms trade laws.

A second consideration is that legal sanctions are only envisioned for unauthorized arms transactions. Bulgarian law does not clearly address cases of gray market arms transactions, those that are licensed but are then diverted to unauthorized clients. Arms trading and transport companies and authorized end users are subject to fines or property sanctions for failure to observe the terms under which the license was issued, but it is not clear how this provision is implemented in cases involving diversion or reexport of authorized arms shipments. In an August 1998 interview, the Bulgarian trade minister answered a question about penalties for companies that circumvent export regulations by stating that “such a company would lose its license, its director would be dismissed, and, in the case of more serious violations, may face court proceedings.”179 A government official told Human Rights Watch in early 1999 that there had been no cases of Bulgarian involvement in illicit arms deals, and that diversions always took place outside Bulgaria’s borders and without the foreknowledge of Bulgarian arms trading companies.180

A third, and related, point is that Bulgaria’s arms trade controls do not apply to illicit arms transactions outside the country’s borders, even if these are arranged with the participation of Bulgarian nationals or Bulgarian companies. No changes are envisioned in the draft arms trade control amendments to criminalize the knowing use of falsified documents, or, more broadly, the conspiracy to divert weapons to unauthorized end users. Instead, the proposed changes would define arms brokering activities and require that the names of authorized intermediaries be declared in arms licensing applications, but without clarifying if such brokers would be held legally accountable for involvement in arms deals whose illegality is masked by deception.

Confusion over Responsibilities
Some observers state that the lines of authority are unclear among the multiple agencies responsible for monitoring arms transactions. For example, each of the ministries represented on the Trade Ministry’s commission for arms trade controls has staff designated to review applications, which is also the responsibility of the secretary to the commission. Approved applications are monitored by the Foreign Affairs Ministry, Trade Ministry, and Interior Ministry, as well as customs officials, border police, and the national intelligence services. While each of these bodies has a role to play, effective arms trade controls require coordinated efforts. Coordination in some areas reportedly has been improved (see Steps Toward Reform, below), but there remains significant room for improvement. Absent clear responsibilities and effective coordination, lower-ranking officials responsible for implementing various aspects of Bulgaria’s arms trade controls may find it easy to overlook their responsibilities, even if top officials are genuinely committed to improving those controls.

Corruption
Widespread corruption presents a serious problem for arms trade controls in Bulgaria. Corrupt practices permeate many government activities, but they have been especially apparent with regard to border controls. In a 1998 opinion poll, for example, 74 percent of respondents said that customs officers accept bribes.181 One border official, responsible for a key checkpoint on the Black Sea coast through which weapons shipments pass, was reportedly arrested in early 1999 for corruption.182 Several observers have attributed corruption to low living standards,including among government officials, noting that senior officials earn the equivalent of U.S.$310 per month.183 An official Bulgarian government statement, however, identifies the problem as rooted in institutional weaknesses—including poorly defined administrative standards and overlapping institutional responsibilities—as well as in a poor legal system.184

Transparency
Another key constraint on the effective implementation of arms trade controls is that access to information about arms deals is extremely limited, even within the government. The Trade Ministry arms trade licensing commission reports periodically on its activities to the Interministerial Council, but parliament is not made aware of pending arms export permits, nor is it informed of approved arms deals. Members of parliament can request such information on an informal, ad hoc basis only.185

More broadly, arms trade information is rarely made public. Bulgaria’s arms trade is subject to secrecy laws, inherited from the communist era, that treat such information as a state secret. They permit each arms trading company to determine whether information about a particular arms deal can be made public. In almost all cases, particularly those involving commercial deals, the arms trading company elects to have the information treated as confidential. Arms deals are rarely announced, even after a deal is completed. A government official claimed that the presence of a free press in Bulgaria helps guarantee transparency with regard to arms deals,186 but this statement was contradicted by journalists and foreign diplomats, who said that the media is not able to investigate arms deals because of arms trade secrecy laws and libel considerations, and because investigative journalists are subject to intimidation.187 An official stated that the government is considering developing new laws that would not treat commercial arms transactions, including ones arranged by private companies, as state secrets.188

117 These controls—embodied in the Law on the Control of Foreign Trade Activity in Arms and Dual-Use Goods and Technologies and the Regulation on Implementation of the Law on Foreign Trade Activity in Arms and Dual-Use Goods and Technologies—regulate the trade in both arms and dual-use goods and technologies, where the latter are items that may serve both civilian and military purposes. This report is primarily concerned with the trade in arms, and only addresses dual-use items in the context of sales that violate international arms embargoes. Unofficial translations of Bulgaria’s arms trade control laws are available via the Internet at: http://www.sipri.se/projects/natexpcon/Bulgaria/bulg_law95.htm and http://www.sipri.se/projects/natexpcon/Bulgaria/decree_38.htm.

118 Two types of trading licenses are available for companies interested in exporting weapons: full licenses permit firms to trade in all categories of weapons; partial licenses are cheaper, but only permit trade in certain classes of weapons. Approximately thirty firms are authorized to engage in the arms trade. Human Rights Watch interview with Blagoy Guenov, Secretary, Interministerial Council on Defense Industry and Logistics, Council of Ministers, and Vladimir Tourtansky, Senior Advisor, Interministerial Council on Defense Industry and Logistics, Council of Ministers, Sofia, February 5, 1999.

119 Human Rights Watch interview with Blagoy Guenov, Secretary, Interministerial Council on Defense Industry and Logistics, Council of Ministers, and Vladimir Tourtansky, Senior Advisor, Interministerial Council on Defense Industry and Logistics, Council of Ministers, Sofia, February 5, 1999.

120 In 1998 several licenses were issued that were valid only for six months. Human Rights Watch interview with Blagoy Guenov, Secretary, Interministerial Council on Defense Industry and Logistics, Council of Ministers, and Vladimir Tourtansky, Senior Advisor, Interministerial Council on Defense Industry and Logistics, Council of Ministers, Sofia, February 5, 1999.

121 In February 1999 an application submitted by a private company was held up because suspicions had been raised. Human Rights Watch interviews with Blagoy Guenov, Secretary, Interministerial Council on Defense Industry and Logistics, Council of Ministers, and Vladimir Tourtansky, Senior Advisor, Interministerial Council on Defense Industry and Logistics, Council of Ministers, Sofia, February 5, 1999; and with Dimiter Zhalev, Department of NATO, WEU, and Security Issues, Ministry of Foreign Affairs, Sofia, February 8, 1999. Under a past government, the arms trading licenses of Teraton and Armimex were reportedly revoked. 24 Chasa (Sofia), October 11, 1995, in FBIS, East Europe, October 20, 1995.

122 “Written Response to Questions Submitted by Human Rights Watch,” prepared by Blagoy Guenov, transmitted on February 5, 1999.

123 Individual arms transaction permits are required for the export, reexport (transshipment), or importation of arms. The requirements are the same in each case. For the purposes of this report, “export permit” includes permits issued for either export or transshipment of arms.

124 The Ministry of Defense can also sell its surplus weapons through a licensed arms trading company, as was the case in 1993 with the export of surplus armored vehicles to Angola (see Surplus Weapons, above).

125 Human Rights Watch interview with Vladimir Tourtansky, Senior Advisor, Interministerial Council on Defense Industry and Logistics, Council of Ministers, Sofia, February 8, 1999. It appears that a representative of one of Bulgaria’s intelligence services also serves on both committees. Human Rights Watch interview with a Bulgarian government official, Sofia, February 1999.

126 According to a Bulgarian official, the trade ministry commission requires that companies seeking an arms export permit submit the following documents: the export permit application, which specifies the quantity and type of goods, as well as the country of destination; a copy of the end-user certificate, signed and stamped by the petitioning arms trading company; copies of the company’s arms trading license; a copy of the contract; and, if an intermediary is involved in the proposed transaction, a copy of the arms trade license of the broker company, signed and stamped by the petitioning arms trading company. Petitioning companies must also pay an application fee. “Written Response to Questions Submitted by Human Rights Watch,” prepared by Blagoy Guenov, transmitted on February 5, 1999.

127 Human Rights Watch interview with Stoyan Nikolov, Chief Expert, Department of Military Economic Cooperation, and Secretary, Commission for Control of Foreign Trade in Arms and Dual-Use Technologies, Ministry of Trade, and Christo Atanasov, Chief Expert, Dual-Use Goods and Export Control Division, Ministry of Trade, Sofia, February 8, 1999. According to another official, the commission may also approach the Interministerial Council for advice on a pending application. Human Rights Watch interview with Vladimir Tourtansky, Senior Advisor, Interministerial Council on Defense Industry and Logistics, Council of Ministers, Sofia, February 8, 1999.

128 Human Rights Watch interview with Stoyan Nikolov, Chief Expert, Department of Military Economic Cooperation, and Secretary, Commission for Control of Foreign Trade in Arms and Dual-Use Technologies, Ministry of Trade, and Christo Atanasov, Chief Expert, Dual-Use Goods and Export Control Division, Ministry of Trade, Sofia, February 8, 1999.

129 “Written Response to Questions Submitted by Human Rights Watch,” prepared by Blagoy Guenov, transmitted on February 5, 1999.

130 Human Rights Watch interview with Vladimir Tourtansky, Senior Advisor, Interministerial Council on Defense Industry and Logistics, Council of Ministers, Sofia, February 8, 1999.

131 Again, a fee is required with the application. “Written Response to Questions Submitted by Human Rights Watch,” prepared by Blagoy Guenov, transmitted on February 5, 1999.

132 The maximum fine is set at 1 million Lv. The fine was equivalent to approximately U.S.$14,000 in 1995, but inflation significantly eroded its value.

133 A government official explained: “Arms export controls are a political priority because we want to join the European Union and NATO.” Human Rights Watch interview with Dimiter Zhalev, Department of NATO, WEU and Security Issues, Ministry of Foreign Affairs, Sofia, February 8, 1999. This view was reinforced by an advisor to President Petar Stoyanov. Human Right Watch interview with Vladimir Philipov, Foreign Affairs Secretary to the President of Bulgaria, Sofia, February 4, 1999.

134 Bulgaria’s control lists have been aligned with those of the Wassenaar Arrangement and the European Union. “Export Control Legal Basis,” Republic of Bulgaria, Ministry of Trade and Tourism, January 1999.

135 The proposed amendments exclude from control arms imports and exports intended for use in international, multilateral, or bilateral exercises, peacekeeping, or training missions to which Bulgaria is a party.

136 Under the proposal, three-to-six-year prison sentences and fines of up to U.S.$60,000 (100 million Lv) would be imposed for a first offense. Repeat offenders would be subject to five to ten years in prison and a fine of up to U.S.$180,000 (300 million Lv).

137 The proposed law would require that “representatives of the parties to the transaction and of the end user” be declared, expanding on an existing provision by requiring this information at the time the application is submitted. The definition proposed to be included in the implementing regulations of the arms trade control law reads: “Broker (middleman) activity shall include all activities, related to the implementation of the foreign trade transaction, including forwarding and transport services and financing, when the person performing such activities is not the actual exporter, importer, or reexporter.” The draft amendments were presented to Human Rights Watch in Bulgarian, so these represent unofficial translations.

138 In May 1998 Bulgaria enacted by decree a law implementing the U.N. arms embargo on the Federal Republic of Yugoslavia, which was imposed two months earlier. A government official asserted that similar decrees had been enacted on other occasions to outlaw violations of arms embargoes. Human Rights Watch interview with Dimiter Zhalev, Department of NATO, WEU, and Security Issues, Ministry of Foreign Affairs, Sofia, February 8, 1999.

139 Human Rights Watch interview with Stoyan Nikolov, Chief Expert, Department of Military Economic Cooperation, and Secretary, Commission for Control of Foreign Trade in Arms and Dual-Use Technologies, Ministry of Trade, and Christo Atanasov, Chief Expert, Dual-Use Goods and Export Control Division, Ministry of Trade, Sofia, February 8, 1999.

140 In particular, the text of the agreement states that its purpose is “to contribute to regional and international security and stability, by promoting transparency and greater responsibility in transfers of conventional arms and dual-use goods and technologies, thus preventing destabilizing accumulations.”

141 Such information is provided only on the recommendation of an interministerial team. Human Rights Watch interview with Dimiter Zhalev, Department of NATO, WEU, and Security Issues, Ministry of Foreign Affairs, Sofia, February 8, 1999.

142 Participating states pledge to avoid arms transfers that, among other conditions, would be likely to violate U.N. sanctions, prolong or aggravate an existing armed conflict, contribute to regional instability, be used for repression or to commit human rights abuses, or be diverted or reexported in a manner that contravenes the purpose for which the OSCE set the criteria. See http://sipri.se/projects/expcon/oscecat.htm.

143 As of March 1999, OSCE arms embargoes were in effect on Armenia and Azerbaijan.

144 In a joint statement, Bulgaria and twelve other non-E.U. member countries stated that they “align themselves to the criteria and principles contained in the Code, which will guide them in their national export control policies.” Council of the European Union General Secretariat Press Release, 10754/98 (Presse 272-G), Brussels, August 3, 1998.

145 In August 1998 Bulgaria’s trade minister identified the countries to which E.U. restrictions apply as including China, the Democratic Republic of Congo (DRC), Nigeria, and Iran. Demokratsiya (Sofia), August 7, 1998, in FBIS, East Europe, August 10, 1998.

146 An official stated that Bulgaria, as a non-E.U. member, does not adhere to these reporting provisions. Human Rights Watch interview with Dimiter Zhalev, Department of NATO, WEU, and Security Issues, Ministry of Foreign Affairs, Sofia, February 8, 1999.

147 Human Rights Watch interview with Stoyan Nikolov, Chief Expert, Department of Military Economic Cooperation, and Secretary, Commission for Control of Foreign Trade in Arms and Dual-Use Technologies, Ministry of Trade, and Christo Atanasov, Chief Expert, Dual-Use Goods and Export Control Division, Ministry of Trade, Sofia, February 8, 1999.

148 This argument is made in Raymond Bonner, “New Weapons Sales.”

149 Demokratsiya (Sofia), August 7, 1998, in FBIS, East Europe, August 10, 1998.

150 “Bulgaria Denies Selling Arms to Terrorists,” RFE/RL Newsline, August 4, 1998. Such a defense of Bulgaria’s involvement in questionable arms deals is consistent with claims made by prior governments that Bulgaria cannot be held responsible if weapons it authorizes for export are subsequently rerouted or reexported. See, for example, Standart News (Sofia), January 16, 1996, in FBIS, East Europe, January 23, 1996.

151 BTA News Agency (Sofia), August 3, 1998, in FBIS, East Europe, August 5, 1998.

152 Georgi Ananiev, Defense Minister, Press Conference at the Bulgarian Embassy, Washington, D.C., March 3, 1999.

153 Human Rights Watch interview with a Bulgarian journalist, Sofia, February 1999.

154 An official asserted that Bulgaria’s arms trade controls had been improved progressively over time, and that the government much more rigorously implemented regulations than had prior governments. Human Rights Watch interview with Colonel Venelin Velikov, Deputy Director, National Service for Combating Organized Crime, Ministry of Interior, Sofia, February 8, 1999. In addition, Bulgaria’s ambassador to the United States wrote that the country’s arms trade record was “far from satisfactory,” except during the 1991-92 period in which he was the prime minister of Bulgaria. Philip Dimitrov, “Letter to the Editor of the New York Times Concerning ‘A Weapons Bazaar Blooming in Bulgaria,’” unpublished and undated. Bulgaria’s deputy industry minister also stated in an interview that the prior government may have approved “questionable” arms deals. See Marc Epstein, “Balkans trafic d’armes au goût bulgare,” L’Express (Paris), December 17, 1998.

155 The replacement of arms industry directors was viewed mostly as an effort by the new government to appoint industry leaders from its own party. Duma (Sofia), April 12, 1997, in FBIS, East Europe, April 15, 1997; and Capital Weekly (Sofia), Reuters Business Briefing, July 4, 1998. In at least one case, the newly appointed director replaced several top company managers. See Kontinent (Sofia), FBIS, East Europe, January 24, 1998. A government official concurred that the management changes were politically-motivated. Human Rights Watch interview with Nicola Tcholakov, Deputy Chief of Mission, Bulgarian Embassy to the United States, Washington, D.C., December 4, 1998.

156 Philip Dimitrov, “Letter to the Editor.” At the time they were removed, one press account stated that the reasons for the replacement had not been made public, while another account, which noted that the deputy director of Kintex took over leadership of the company, stated that the removals were due to the trading companies’ poor economic performance. Standart News (Sofia), September 23, 1998, in FBIS, East Europe, September 24, 1998; and BTA News Agency (Sofia), July 3, 1998, in FBIS, East Europe, July 3, 1998.

157 Philip Dimitrov, Ambassador to the United States, Press Conference at the Bulgarian Embassy, Washington, D.C., March 3, 1999.

158 Standart News (Sofia), FBIS, East Europe, September 24, 1998.

159 Human Rights Watch interview with Nicola Tcholakov, Deputy Chief of Mission, Bulgarian Embassy to the United States, Washington, D.C., December 4, 1998. See also, Demokratsiya (Sofia), July 6, 1998, in FBIS, East Europe, July 7, 1998.

160 Human Rights Watch interview with Vladimir Tourtansky, Senior Advisor, Interministerial Council on Defense Industry and Logistics, Council of Ministers, Sofia, February 8, 1999. In another example of the appointment of former arms trade control officials to arms industry posts, it was reported that a former member of the Trade Ministry commission was named to lead Armimex. Standart News (Sofia), September 23, 1998, in FBIS, East Europe, September 24, 1998.

161 Human Rights Watch interview with a Bulgarian government official, Sofia, February 1999.

162 The officials stated that an inquiry had been initiated about a petitioning company about which suspicions had been raised, and that this investigation would cause consideration of the application to be postponed. Human Rights Watch interview with Blagoy Guenov, Secretary, Interministerial Council on Defense Industry and Logistics, Council of Ministers, and Vladimir Tourtansky, Senior Advisor, Interministerial Council on Defense Industry and Logistics, Council of Ministers, Sofia, February 5, 1999.

163 Human Rights Watch interviews with Blagoy Guenov, Secretary, Interministerial Council on Defense Industry and Logistics, Council of Ministers, and Vladimir Tourtansky, Senior Advisor, Interministerial Council on Defense Industry and Logistics, Council of Ministers, Sofia, February 5, 1999; and with Dimiter Zhalev, Department of NATO, WEU and Security Issues, Ministry of Foreign Affairs, Sofia, February 8, 1999.

164 Human Rights Watch interview with a Bulgarian government official, Sofia, February 1999.

165 Human Rights Watch interview with Col. Venelin Velikov, Deputy Director, National Service for Combating Organized Crime, Ministry of Interior, Sofia, February 8, 1999.

166 Human Rights Watch interview with Bulgarian government official, Sofia, February 1999.

167 Human Rights Watch interviews with Vladimir Tourtansky, Senior Advisor, Council of Ministers, Interministerial Council on Defense Industry and Logistics; Dimiter Zhalev, Department of NATO, WEU and Security Issues, Ministry of Foreign Affairs; and Stoyan Nikolov, Chief Expert, Department of Military Economic Cooperation, and Secretary, Commission for Control of Foreign Trade in Arms and Dual-Use Technologies, Ministry of Trade, and Christo Atanasov, Chief Expert, Dual-Use Goods and Export Control Division, Ministry of Trade, Sofia, February 8, 1999.

168 Human Rights Watch interviews with Vladimir Tourtansky, Senior Advisor, Council of Ministers, Interministerial Council on Defense Industry and Logistics; and with Col. Venelin Velikov, Deputy Director, National Service for Combating Organized Crime, Ministry of Interior, Sofia, February 1999.

169 Human Rights Watch interview with Stoyan Nikolov, Chief Expert, Department of Military Economic Cooperation, and Secretary, Commission for Control of Foreign Trade in Arms and Dual-Use Technologies, Ministry of Trade, and Christo Atanasov, Chief Expert, Dual-Use Goods and Export Control Division, Ministry of Trade, Sofia, February 8, 1999.

170 Human Rights Watch interview with a Bulgarian government official, Sofia, February 1999.

171 After the interviewer returned to the question repeatedly, the officials responded by stating that they presumed that the Trade Ministry commission would deny future applications for arms sales to that country. Human Rights Watch interview with Blagoy Guenov, Secretary, Interministerial Council on Defense Industry and Logistics, Council of Ministers, and Vladimir Tourtansky, Senior Advisor, Interministerial Council on Defense Industry and Logistics, Council of Ministers, Sofia, February 5, 1999. Similarly, Bulgaria’s arms trade controls do not include clear penalties for arms brokers and arms trading companies that furnish false documents (see Legal Accountability, below).

172 Human Rights Watch interview with Col. Venelin Velikov, Deputy Director, National Service for Combating Organized Crime, Ministry of Interior, Sofia, February 1999.

173 The other verification means described by a government official include: exercising licensing control over Bulgarian transport companies, when these are used to deliver the shipment; verifying through Bulgarian embassies or trade missions overseas, when foreign transport firms are used; monitoring the source of payment for the arms; checking the designated route of the shipment; and gathering intelligence through security services. “Written Response to Questions Submitted by Human Rights Watch,” prepared by Blagoy Guenov, transmitted on February 5, 1999.

174 Human Rights Watch interview with Plamen Radonov, Deputy Defense Minister for Logistics and Acquisition, Ministry of Defense, and Col. Hristo Stanimirov, Chief of Staff, Defense Economy Department, Ministry of Defense, Sofia, February 9, 1999.

175 Human Rights Watch interview with Dimiter Zhalev, Ministry of Foreign Affairs, Sofia, February 8, 1999.

176 Dimiter Zhalev, Department of NATO, WEU and Security Issues, Ministry of Foreign Affairs, Sofia, February 8, 1999. Two other sources echoed the need for training. Human Right Watch interviews with Vladimir Philipov, Foreign Affairs Secretary to the President of Bulgaria; and with a foreign diplomat, Sofia, February 1999. Some training programs have been undertaken or are underway (see Steps Toward Reform, below).

177 In 1995 three military officers were arrested in connection with the disappearance in transit two years earlier of a consignment of Bulgarian weapons—including 10,000 mine throwers, 10,000 mines, and 250 sniper rifles worth an estimated U.S.$670,000—destined for Albania, from where they were believed to have been illegally diverted to Bosnia or Serbia. A Bulgarian journalist stated that the investigation showed that the equipment had left Bulgaria in accordance with the law and then disappeared in the Former Yugoslav Republic of Macedonia, and that therefore the officers were not prosecuted. Human Rights Watch interview with a Bulgarian journalist, Sofia, February 1999. See also BTA News Agency, June 16, 1995, available via the Internet at: http://www.hri.org/news/agencies/bta/95-06-16.bta.html#05, and Trud (Sofia), November 14, 1997, in FBIS, East Europe, November 19, 1997.

178 “The Quality of Governance—The Challenge of the New Millennium,” presented by Mario Tagarinski, Minister of Public Administration, Republic of Bulgaria, to the International Conference on Fighting Corruption and Safeguarding Integrity Among Justice and Security Officials, Washington, D.C., February 24-26, 1999.

179 Demokratsiya (Sofia), August 7, 1998, in FBIS, East Europe, August 10, 1998.

180 Human Rights Watch interview with a Bulgarian government official, Sofia, February 1999.

181 “Bulgarian Polls Suggest Widespread Corruption,” RFE/RL Newsline, February 3, 1998.

182 Human Rights Watch interview with a Bulgarian journalist, Sofia, February 1999.

183 Western diplomats have told Human Rights Watch that corruption in Bulgaria reaches into the upper levels of government, and includes officials in the two commissions responsible for arms trade licensing. Human Rights Watch interviews with foreign diplomats, Sofia, February 1999.

184 Tagarinski, “The Quality of Governance.”

185 Human Rights Watch interview with Dimitar Abadjiev, Member of Parliament (UDF), Sofia, February 8, 1999. See also, “Written Response to Questions Submitted by Human Rights Watch,” prepared by Blagoy Guenov, transmitted on February 5, 1999.

186 “Written Response to Questions Submitted by Human Rights Watch,” prepared by Blagoy Guenov, transmitted on February 5, 1999.

187 Human Rights Watch interviews with journalists and foreign diplomats, Sofia February 1999. See also, Human Rights Watch, World Report 1999 (New York: Human Rights Watch, 1998), pp. 254-55, available via the Internet at: http://www.hrw.org.

188 Human Rights Watch interview with Vladimir Tourtansky, Senior Advisor, Interministerial Council on Defense Industry and Logistics, Council of Ministers, Sofia, February 8, 1999.

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