LAW ON EXPORT CREDIT INSURANCE

Pub. - State Gazette, No. 61 of 29.05.1998; amended and supplemented, No. 112 of 29.12.2001; No. 92 of 15.10.2004; amended, No. 103 of 23.12.2005; in force from 01.01.2006; amended and supplemented, No. 41 of 22.05.2007; amended, No. 36 of 04.04.2008; amended, No. 82 of 16.10.2009, in force from 16.10.2009; amended, No. 82 of 26.10.2012; amended, No. 15 of 15.02.2013, in force from 01.01.2014; amended, No. 14 of 20.02.2015; amended, No. 58 of 18.07.2017, in force from 18.07.2017; amended and supplemented, No. 100 of 04.12.2018, in force from 04.12.2018; amended, No. 41 of 10.05.2024, in force from 10.05.2024; amended, No. 55 of 16.06.2026.

Chapter One

GENERAL PROVISIONS

Art. 1. (1) (Amended - SG, No. 112 of 2001, No. 92 of 2004.) This Law regulates the conditions and procedure for insurance and reinsurance at the expense of the State of export risks specified in Art. 3, para. 1, related to the production and export of Bulgarian goods and services or the realization of Bulgarian investments abroad.

(2) (New - SG, No. 112 of 2001, amended, No. 92 of 2004.) The insurance under para. 1 ensures traders in cases of property damage suffered by them, resulting from commercial or political risk.

(3) (Previous para. 2, supplemented - SG, No. 112 of 2001.) The insurance under para. 1 aims at:

1. implementation of the national strategy in the field of foreign trade exchange and realization of Bulgarian investments abroad;
2. development of the country's export potential and increasing the competitiveness of the export of Bulgarian goods and services on international markets.

Art. 2. (Amended - SG, No. 112 of 2001; amended, No. 41 of 2007; supplemented, No. 100 of 2018, in force from 04.12.2018.) (1) The activity under this Law is carried out by the Joint Stock Company "Bulgarian Export Credit Insurance Agency", hereinafter referred to as "BECIA" - JSC. The insurance and reinsurance contracts are concluded in the name of "BECIA" - JSC.

(2) (Repealed - SG, No. 41 of 2007.)

(3) (New - SG, No. 100 of 2018, in force from 04.12.2018.) The rights of the State in the general meeting of shareholders of "BECIA" - JSC are exercised by the Minister of Economy, Investments and Industry.

(4) (New - SG, No. 100 of 2018, in force from 04.12.2018.) "BECIA" - JSC has a two-tier management system.

(5) (New - SG, No. 100 of 2018, in force from 04.12.2018.) "BECIA" - JSC ensures the implementation of state policy in insurance and reinsurance under this Law of export risks related to the production and export of Bulgarian goods and services or the realization of Bulgarian investments abroad.

(6) (New - SG, No. 100 of 2018, in force from 04.12.2018.) The Council of Ministers, upon proposal by the Minister of Economy, Investments and Industry, approves a three-year strategy for the activity of "BECIA" - JSC, in accordance with national economic policy.

(7) (New - SG, No. 100 of 2018, in force from 04.12.2018.) The strategy under para. 6 is proposed for approval to the Minister of Economy, Investments and Industry by "BECIA" - JSC.

Art. 3. (Amended - SG, No. 112 of 2001, No. 92 of 2004; amended and supplemented, No. 41 of 2007; amended and supplemented, No. 100 of 2018, in force from 04.12.2018.) (1) (Supplemented - SG, No. 100 of 2018, in force from 04.12.2018.) The activity at the expense of the State under this Law covers insurance and reinsurance of non-market risk, including the following export risks related to:

1. production of Bulgarian goods and services for export;
2. financing of the export of Bulgarian goods and services;
3. Bulgarian investments abroad against political risk;
4. bank loans intended for the realization of Bulgarian investments abroad;
5. (supplemented - SG, No. 100 of 2018, in force from 04.12.2018.) bank guarantees and other direct and indirect guarantees related to the realization of the export of Bulgarian goods, as well as the provision of services, or related to the implementation of projects with international financing;
6. pre-export financing;
7. reinsurance of insurance contracts for risks under items 1-6 and para. 2, concluded by foreign export credit insurance institutions, under conditions of reciprocity.

(2) (Amended - SG, No. 100 of 2018, in force from 04.12.2018.) The activity at the expense of the State under this Law also covers insurance against market risk of export credits related to the production and export of Bulgarian goods and services or the realization of Bulgarian investments abroad, which cannot be freely insured or reinsured on the insurance market, in cases of essential interest for the national economy, based on a decision of the Supervisory Board of "BECIA" - JSC.

(3) (Amended - SG, No. 41 of 2007.) In connection with the implementation of the activity under para. 1, "BECIA" - JSC may carry out activity in providing services to foreign export credit insurance institutions under conditions of reciprocity.

(4) (New - SG, No. 41 of 2007.) The activity at the expense of the State under this Law also covers insurance of bank and non-bank loans granted to small and medium-sized enterprises.

Art. 3a. (New - SG, No. 41 of 2007.) (1) When providing insurance coverage from "BECIA" - JSC, jointly with an organization or state institution of a Member State of the European Union, for a transaction involving one or several subcontractors in one or several Member States of the European Union, the provisions of the Model Agreement for the settlement of mutual obligations of export insurers according to Annex No. 1 shall apply.

(2) The agreement under para. 1 regulates the mutual obligations of export insurers from the Member States of the European Union in cases where the following conditions are met:

1. a certain enterprise, hereinafter referred to as "main contractor", hires as a subcontractor one or several enterprises, hereinafter referred to as "subcontractors", from one or several Member States of the European Union, for an export transaction, for which the main contractor is a party, concluded with a certain enterprise, hereinafter referred to as "buyer", located in:
   a) a country that is not a Member State of the European Union, or b) a Member State of the European Union, different from the country of the main contractor and the subcontractor or subcontractors;
2. the main contractor undertakes to pay the subcontractor or the subcontractors the part of the sums due by the buyer, as well as to perform, if necessary, all formalities for the transfer of the part of the sums paid by the buyer to the subcontractor or subcontractors;
3. there are no contractual relations between the subcontractor or subcontractors and the buyer;
4. the export insurer of the main contractor, hereinafter referred to as "main insurer", and the export insurer or export insurers of the subcontractor or subcontractors, hereinafter referred to as "joint insurers", agree to guarantee according to their respective general conditions the part of the transaction performed in their country against the risks determined by them in each separate agreement.

(3) The parties to the agreement may agree on additional conditions, insofar as they do not contradict the provisions of the Model Agreement according to Annex No. 1.

Art. 3b. (New - SG, No. 41 of 2007.) (1) When providing insurance coverage directly or indirectly at the expense of or with the support of one or several Member States of the European Union, for transactions related to the export of goods and/or services, originating from the Member States of the European Union, where the total duration of the risk is equal to or greater than two years, taking into account the repayment period, including the production duration, the provisions of the General Principles for the insurance of export credits according to Annex No. 2 shall apply.

(2) The General Principles under para. 1 do not apply to the insurance of tender guarantees, advance payment guarantees, performance guarantees, and warranty retentions, as well as for coverage of risks related to equipment and materials for construction carried out in the country in execution of a commercial contract.

(3) "BECIA"-JSC, insures according to the General Principles according to Annex No. 2 the transactions related to the export of goods and/or services intended for countries that are not Member States of the European Union, and these transactions are financed by a buyer's loan or a supplier's loan, or are paid in cash.

Art. 4. (Amended - SG, No. 112 of 2001, No. 92 of 2004.) Non-market risk under this Law is:

1. short-term commercial and political risk, with the exception of the risk defined in Art. 5 as market risk;
2. medium-term commercial and political risk, with the exception of the risk defined in Art. 5 as market risk;
3. long-term commercial and political risk.

(Chapter Two, heading repealed - SG, No. 112 of 2001.)

Art. 5. (Amended - SG, No. 112 of 2001.) (1) (Amended - SG, No. 92 of 2004.) Market risk under this Law is any commercial or political risk for a period up to two years, where the debtor under the export contract is a private-law or public-law entity, which is a legal or natural person from a country defined as a country with market risk.

(2) A list of countries with market risk under para. 1 is adopted and published in the "State Gazette" by the Council of Ministers.

Art. 6. (Amended - SG, No. 112 of 2001, No. 92 of 2004; amended and supplemented, No. 41 of 2007; amended, No. 100 of 2018, in force from 04.12.2018.) (1) Political risk under this Law is:

1. occurrence of extraordinary circumstances in the debtor's country or in a third country related to payments, hindering the settlement of obligations related to the production and export of Bulgarian goods and services or the realization of Bulgarian investments abroad, including:
   a) occurrence of political events, such as war, coup, civil unrest, riots, strikes, embargo, as well as natural disasters or other events with comparable effect; b) declaration of a general moratorium on payments; c) changes in the regime of currency payments; d) adoption or amendment of normative acts or decisions of the government or another state body; e) confiscation or nationalization;
2. (amended - SG, No. 100 of 2018, in force from 04.12.2018.) refusal to pay or delay of the due payment, when the debtor is a foreign state, a state body, or a state organization of a foreign state, for which bankruptcy proceedings cannot be applied;
3. restrictions or ban on the export of goods or services in execution of obligations under international treaties, of which the Republic of Bulgaria is a party, hindering the implementation of export contracts concluded before their introduction.

(2) (New - SG, No. 41 of 2007.) In cases of medium-term and long-term risk in the insurance of export credits, para. 1 shall apply, insofar as items 15-22 of the General Principles according to Annex No. 2 do not provide otherwise.

Art. 7. (Amended - SG, No. 112 of 2001; supplemented, No. 41 of 2007; amended, No. 100 of 2018, in force from 04.12.2018.) (1) Commercial risk under this Law is:

1. insolvency or declaration of bankruptcy of the debtor under the contract;
2. (amended, No. 100 of 2018, in force from 04.12.2018.) delay of the due payment after the occurrence of the payment date specified in the contract, for reasons not related to the performance of the contract;
3. unilateral termination of the contract by the debtor without the presence of a legal basis for this;
4. refusal of the debtor to accept the goods or services - subject of the contract, without the presence of a legal basis for this.

(2) In the cases under para. 1, there is no commercial risk when the debtor under the contract is a foreign state, a state body, or a state organization of a foreign state.

(3) (New - SG, No. 41 of 2007; amended, No. 100 of 2018, in force from 04.12.2018.) In cases of medium-term and long-term risk, paras. 1 and 2 shall apply, insofar as items 14-16 of the General Principles according to Annex No. 2 do not provide otherwise.

Art. 8. (Amended - SG, No. 112 of 2001, No. 92 of 2004; amended, No. 41 of 2007.) In insurance under Art. 3, para. 1, the amount of the insurance indemnity is not more than 95 percent of the insured sum.

Art. 9. (Amended - SG, No. 112 of 2001; amended, No. 92 of 2004; amended, No. 82 of 2009; amended, No. 100 of 2018, in force from 04.12.2018.) (1) (Amended - SG, No. 112 of 2001, No. 92 of 2004.) The Law on the State Budget of the Republic of Bulgaria for the respective year provides for funds from the central budget for the payment of insurance indemnities under Art. 3.

(2) (Amended - SG, No. 112 of 2001; amended, No. 100 of 2018, in force from 04.12.2018.) The funds under para. 1 are provided in case of shortage of funds under the account under Art. 14, para. 2, based on an act of the Council of Ministers upon proposal by the Minister of Economy, Investments and Industry.

(3) (Repealed - SG, No. 112 of 2001, new, No. 92 of 2004; amended, No. 82 of 2009; repealed, No. 100 of 2018, in force from 04.12.2018.)

Art. 10. (Amended - SG, No. 112 of 2001, No. 92 of 2004; No. 15 of 2013, in force from 01.01.2014; amended, No. 100 of 2018, in force from 04.12.2018.) (1) "BECIA" - JSC may conclude insurance and reinsurance contracts under Art. 3 up to the size of its insurance capacity.

(2) Insurance capacity is the sum of:

1. the total amount of insured credit limits under concluded insurance contracts from "BECIA" - JSC, under this Law;
2. the total amount of credit limits under this Law, approved and proposed by "BECIA" - JSC, to potential insured exporters or investors;
3. the total amount of credit limits, for which "BECIA" - JSC is the reinsurer, according to Art. 3, para. 1, item 7;
4. the total amount of expected income from the predicted development of the activity of "BECIA" - JSC.

(3) The sum under para. 2 is reduced by the sum of reinsured credit limits under the concluded reinsurance contracts from "BECIA" - JSC.

(4) (Amended - SG, No. 15 of 2013, in force from 01.01.2014; amended, No. 100 of 2018, in force from 04.12.2018.) The insurance capacity cannot exceed the sum of the planned amount of funds from the state budget for the payment of indemnities under insurance contracts under Art. 3 for the respective year, multiplied by a coefficient approved by a decision of the Council of Ministers.

(5) (Amended - SG, No. 15 of 2013, in force from 01.01.2014; repealed, No. 100 of 2018, in force from 04.12.2018.)

(6) The methodology and procedure for determining the coefficient under para. 4 are determined by a regulation of the Council of Ministers.

Art. 10a. (New - SG, No. 112 of 2001, amended, No. 103 of 2005.) (1) "BECIA" - JSC is an insurer within the meaning of the Insurance Code. The Insurance Code applies to "BECIA" - JSC, insofar as this Law does not regulate otherwise.

(2) The Insurance Code does not apply to the activity of "BECIA" - JSC under this Law, with the exception of the provisions of Part Four, which apply to insurance legal relations arising under this Law.

Art. 10b. (New - SG, No. 41 of 2007.) "BECIA" - JSC prepares and sends the due notifications according to Section IV of the General Principles according to Annex No. 2.

Chapter Two

(Superior text of Chapter Three - SG, No. 112 of 2001) Supervisory Board of "BECIA" - JSC (Heading amended - SG, No. 100 of 2018, in force from 04.12.2018.)

Art. 11. (Amended - SG, No. 112 of 2001; amended, No. 36 of 2008; amended, No. 82 of 2009; amended, No. 82 of 2012; amended, No. 58 of 2017, in force from 18.07.2017; repealed, No. 100 of 2018, in force from 04.12.2018.)

Art. 12. (Repealed - SG, No. 112 of 2001).

Art. 13. (Amended - SG, No. 112 of 2001; amended, No. 92 of 2004; amended, No. 82 of 2009; amended, No. 100 of 2018, in force from 04.12.2018.) (1) (Amended - SG, No. 112 of 2001, No. 92 of 2004; amended, No. 100 of 2018, in force from 04.12.2018.) The Supervisory Board:

1. (amended - SG, No. 100 of 2018, in force from 04.12.2018.) prepares a three-year strategy for the activity of "BECIA" - JSC, in accordance with national economic policy and proposes it to the Minister of Economy, Investments and Industry;
2. (amended, No. 82 of 2009; amended, No. 100 of 2018, in force from 04.12.2018.) proposes to the Minister of Economy, Investments and Industry the amount of funds under Art. 9, para. 1, to be included in the draft Law on the State Budget of the Republic of Bulgaria for the respective year;
3. (amended, No. 100 of 2018, in force from 04.12.2018.) annually adopts a classification of countries by degree of risk and determines the maximum size of exposures by country;
4. (repealed - SG, No. 100 of 2018, in force from 04.12.2018.) ;
5. (amended, No. 82 of 2009, in force from 16.10.2009.) annually prepares an annual report on the activity under Art. 3 and presents it through the Minister of Economy, Investments and Industry to the Council of Ministers by May 31 of the following calendar year;
6. (amended, No. 100 of 2018, in force from 04.12.2018.) annually approves a methodology for the division of costs related to the activity under Art. 3;
7. (amended, No. 100 of 2018, in force from 04.12.2018.) annually approves an investment program of "BECIA" - JSC;
8. (amended, No. 100 of 2018, in force from 04.12.2018.) requires from the Management Board of "BECIA" - JSC every quarter information regarding the concluded insurance contracts, territorial and sectoral analysis of the distribution of insured exports and investments, the size of applied credit limits for insurance, compared with the insurance capacity of "BECIA" - JSC, the paid insurance indemnities, and the presented but unpaid insurance indemnities under concluded insurance contracts under this Law;
9. (repealed - SG, No. 100 of 2018, in force from 04.12.2018.) ;
10. adopts other decisions related to the activity of "BECIA" - JSC under this Law.

(2) (Amended - SG, No. 112 of 2001; repealed, No. 100 of 2018, in force from 04.12.2018.) .

(3) (New - SG, No. 112 of 2001; amended, No. 100 of 2018, in force from 04.12.2018.) The Minister of Economy, Investments and Industry makes a proposal to the Council of Ministers for the adoption of a decision to transfer the concluded by "BECIA" - JSC under the procedure of this Law insurance and reinsurance contracts in case of opening proceedings for liquidation or bankruptcy of "BECIA" - JSC.

Chapter Three

(Superior text of Chapter Four - SG, No. 112 of 2001) FINANCIAL SECURING OF THE IMPLEMENTATION OF THE LAW (Heading amended - SG, No. 92 of 2004.)

Art. 13a. (New - SG, No. 92 of 2004; amended, No. 100 of 2018, in force from 04.12.2018.) (1) The State guarantees the payment of insurance indemnities for the activity under Art. 3. Insurance indemnities for the current year are paid up to the size of the funds provided in the state budget under the procedure of Art. 9.

(2) (Amended - SG, No. 100 of 2018, in force from 04.12.2018.) The mechanism for claiming the funds under Art. 9 and for the payment of insurance indemnities with funds under Art. 9, para. 1 is determined by the regulation under Art. 10, para. 6.

Art. 14. (Amended and supplemented - SG, No. 112 of 2001; amended, No. 82 of 2012; amended and supplemented, No. 100 of 2018, in force from 04.12.2018.) (1) (Amended - SG, No. 112 of 2001.) For the activity under this Law, "BECIA" - JSC maintains separate analytical accounting records.

(2) (New - SG, No. 112 of 2001.) For the performance of financial operations related to the activity under this Law, a separate bank account is opened and maintained by "BECIA" - JSC.

(3) (New - SG, No. 112 of 2001; amended, No. 100 of 2018, in force from 04.12.2018.) The disposal of funds under the account under para. 2 is carried out under conditions and procedure approved by the Supervisory Board.

(4) (New - SG, No. 100 of 2018, in force from 04.12.2018.) The insurance indemnities under Art. 3, para. 1 and 2 are paid by "BECIA" - JSC.

(5) (Previous para. 2, amended - SG, No. 112 of 2001, No. 92 of 2004; previous para. 4, No. 100 of 2018, in force from 04.12.2018.) The funds under the account under para. 2 are collected from:

1. insurance premiums under concluded insurance contracts from "BECIA" - JSC, under this Law;
2. transfer of funds, determined by the Law on the State Budget of the Republic of Bulgaria for the respective year, for the activity of "BECIA" - JSC under Art. 3;
3. donations and grants;
4. other income.

(6) (Repealed, previous para. 3, amended - SG, No. 112 of 2001, No. 92 of 2004; previous para. 5, amended, No. 100 of 2018, in force from 04.12.2018.) The funds from the account are spent for:

1. payment of insurance indemnities under concluded insurance contracts from "BECIA" - JSC, under this Law;
2. payment of ceded premiums in reinsurance of the activity of "BECIA" - JSC, from another insurer;
3. payment of commissions to a foreign insurer in its reinsurance by "BECIA" - JSC;
4. (amended - SG, No. 100 of 2018, in force from 04.12.2018.) administrative costs for the activity of "BECIA" - JSC under this Law up to an amount determined by the Supervisory Board;
5. (repealed - SG, No. 82 of 2012);
6. other extraordinary costs related to the activity of "BECIA" - JSC under this Law.

(7) (Previous para. 4, amended - SG, No. 112 of 2001, No. 92 of 2004; previous para. 6, No. 100 of 2018, in force from 04.12.2018.) The annual profit from the activity under Art. 1, para. 1 is not distributed, but is entirely transferred to a separate reserve, which is used to cover losses from the activity under this Law.

(8) (New - SG, No. 112 of 2001; previous para. 7, No. 100 of 2018, in force from 04.12.2018.) Control over the financial operations related to the activity under Art. 3 is exercised by the Court of Auditors.

Art. 15. (Amended - SG, No. 112 of 2001.) (1) The funds under the account under Art. 14, para. 2 cannot be used to satisfy obligations to creditors under insurance contracts concluded by "BECIA" - JSC for its own account, as well as for administrative and other costs of "BECIA" - JSC for activities outside those specified in Art. 3.

(2) In case of declaring "BECIA" - JSC bankrupt, the funds under the account under Art. 14, para. 2 do not enter the bankruptcy estate.

Art. 16. (Amended - SG, No. 112 of 2001; amended, No. 100 of 2018, in force from 04.12.2018.) "BECIA" - JSC periodically provides information to the Minister of Economy, Investments and Industry on the operations performed on the account under Art. 14, para. 2.

Art. 17. (New - SG, No. 112 of 2001; amended, No. 100 of 2018, in force from 04.12.2018.) The income from the activity under Art. 3 and the income under Art. 14, para. 5, items 3 and 4 are exempt from state and local taxes and fees.

Supplementary Provisions

(Amended - SG, No. 41 of 2007.)

§ 1 (Previous § 1 - SG, No. 112 of 2001; Previous Paragraph Only - amended, No. 41 of 2007; amended, No. 100 of 2018, in force from 04.12.2018.) For the purposes of this Law:

1. "Bulgarian goods" are goods whose Bulgarian origin is certified by a document issued by the competent authorities of the Republic of Bulgaria.
2. (Amended - SG, No. 112 of 2001.) "Bulgarian services" are services provided to a foreign natural or legal person by a trader registered under the Commerce Act.
3. (New - SG, No. 112 of 2001.) "Bulgarian investments" are investments realized abroad by a trader registered under the Commerce Act.
4. (Previous item 3, amended - SG, No. 112 of 2001; amended, No. 41 of 2007.) "Short-term risk" is the risk for a period up to two years.
5. (Previous item 4, amended - SG, No. 112 of 2001; amended, No. 41 of 2007.) "Medium-term risk" is the risk for a period from two to five years.
6. (Previous item 5, amended - SG, No. 112 of 2001.) "Long-term risk" is the risk for a period over five years.
7. (New - SG, No. 92 of 2004.) "Losses from production risk" exist when the performance of contractual obligations or the production of ordered goods...