US embassy cable - 05SOFIA1950

UNCLAS SECTION 01 OF 08 SOFIA 001950 
 
SIPDIS 
 
STATE FOR EB/MTA 
USTR FOR GLORIA BLUE 
GENEVA FOR USTR 
 
E.O. 12958: N/A 
TAGS: ETRD, EFIN, ECON, KIPR, BEXP, EAGR, PGOV, BU 
SUBJECT: 2006 NTE UPDATE FOR BULGARIA 
 
1. The following is Embassy's input for the 2006 National 
Trade Estimate (NTE) report for Bulgaria. The text -- 
including the ranking of barriers -- has been sent 
electronically to USTR and State (EB). 
 
RANKING OF BARRIERS: The following are general range 
estimates of what the increase in U.S. exports to Bulgaria 
would be if barriers were removed: 
--FAS-Sofia estimates losses in potential U.S. 
agricultural-related exports at USD 10-15 million 
due to the applied trade regime. Tariffs and tariff 
rated quotas cause losses of about USD 10 million for 
poultry and about USD 5 million for pork products. 
--The Association of American Pharmaceutical Companies 
in Bulgaria (AAPCB) estimates that if barriers to trade 
were eliminated for U.S. pharmaceutical imports, 
increased annual imports would be about USD 10-25 
million. AAPCB estimates the pharmo-economic analysis 
used in composing the positive list could result in an 
additional loss for American Pharmaceutical Companies 
of USD 15-20 million.  Three US companies (Merck, J&J and 
Pfizer) estimate that the reduction of the patent life of 
their innovative medical products in violation of 
international standards would result in a loss of USD 29 
million over the next two years; 
--The Business Software Alliance (BSA) estimates 
losses to U.S. producers of business applications at 
USD 16 million for 2004, with a piracy rate of 71 percent;. 
--A U.S. information technology (IT) company (Microsoft) 
estimates that if the Bulgarian government eliminated 
administrative barriers to the sale of its products and 
adequately protected IPRs its overall exports to 
Bulgaria could increase more than four times or by USD 
80-100 million; 
--U.S. Recording Industry representatives estimate 
that losses from sales in Bulgaria of pirated/smuggled 
CDs were USD 6.5 million in 2004; 
--An American insurance firm estimates that a lifting 
of government procurement barriers for insurance could 
generate contracts worth USD 10-25 million (about 25 percent 
of the market); 
--The Distilled Spirits Council of the United States 
(DISCUS) maintains that high tariffs on U.S. distilled 
spirits encourage smuggling and counterfeiting (we do 
not have an estimate for such losses, but place it 
under USD 10 million); 
 
(Note:  In general, increased exports if barriers were 
removed are hard to quantify.  U.S. investments also draw 
U.S. exports, so problems with the investment climate spill 
over to export potential. The following are some general 
matters negatively affecting U.S. exports to Bulgaria: 
-- The 2005 constitutional amendment on foreign 
individuals' property rights in Bulgaria favors EU over 
U.S. investors and puts US citizens at disadvantage; 
-- U.S. investors are disadvantaged by not having an 
avoidance of double taxation agreement with Bulgaria. 
 
TEXT OF NATIONAL TRADE ESTIMATE SUBMISSION 
------------------------------------------ 
 
Begin Text 
 
BULGARIA 
 
TRADE SUMMARY 
 
((To be provided by USTR)) 
 
IMPORT POLICIES 
 
 
Tariffs 
Bulgaria's trade policies are shaped primarily by its World 
Trade Organization (WTO) membership and by its status as a 
candidate for EU membership. Bulgaria has a preferential 
trade agreement with the European Union (EU) under its 
Europe Agreement, and free trade agreements with the 
European Free Trade Area (EFTA) countries. It also has free 
trade agreements with its Central European neighbors 
(CEFTA), Turkey, Macedonia, Albania, Serbia and Montenegro, 
Bosnia and Herzegovina, Israel and Moldova. 
 
Upon accession to the EU, Bulgaria will be required to 
renounce its Europe Agreement and the other free trade 
agreements, and to align its tariffs with those of the EU. 
US exporters/investors will benefit overall from Bulgaria's 
EU accession since Bulgaria will join the EU's trade policy 
regime - a single set of trade rules and customs procedures. 
US exporters will benefit from lower tariffs as well. 
Average most favored nation (MFN) tariff rate, for example, 
would come down from its current level of 11.55 percent to 
an average of 6.5 percent. 
 
For 2005, Bulgaria's average import tariff is 11.48 percent; 
the average level for industrial goods is 8.58 percent and 
the average level for agricultural goods is 22.89 percent. 
The maximum ad valorem level for agricultural goods, which 
is applied on 0.38 percent of tariff positions, is 75 
percent. Bulgaria has eliminated all tariffs on industrial 
imports from the EU under its association agreement with the 
European Union. Industrial exports to Bulgaria from the rest 
of the world face tariffs following their approval, expected 
in mid-December.  (Note:  Post will provide information on 
Bulgaria's 2006 customs tariffs following their approval, 
expected in mid-December. 
 
Bulgaria's agricultural trade regime is characterized by 
high MFN tariffs, particularly for red meat and poultry, and 
by preferential agreements with the EU and CEFTA. Ad valorem 
duties and minimum customs charges of more than 100 percent 
serve as incentives for smuggling and fraud. Cargoes are 
often improperly identified, and falsely labeled and 
declared in an effort to avoid customs charges. The 
Bulgarian customs service also uses minimum import prices, 
which appear to be applied arbitrarily, to calculate customs 
duties, particularly on poultry shipments. 
 
FOREIGN TRADE BARRIERS 
 
Bulgaria provides the EU with preferential tariff rates and 
reciprocal duty elimination on numerous agricultural 
products, as well as on wine. These preferences are hurting 
U.S. agricultural exporters who face higher MFN rates. In 
particular, the high import tariffs favor Bulgaria's 
inefficient domestic chicken and pig meat industries. Import 
tariffs on U.S. chicken are 68 percent, with frozen cut 
parts subject to a 74 percent tariff. 
 
The U.S. Government is currently reviewing Bulgaria's 
continued eligibility for the U.S. Generalized System of 
Preferences (GSP) program in view of the preferential 
treatment it affords to the EU. The U.S. has urged the 
Bulgarian government to lower MFN tariffs on a range of 
items to reduce the tariff differential and its negative 
effect on U.S. commerce. 
 
Non-tariff Barriers 
 
In general, customs regulations and policies are reported to 
be cumbersome, arbitrary and inconsistent. Problems cited by 
U.S. companies include excessive documentation requirements, 
slow processing of shipments, and corruption. 
 
Bulgaria uses the single customs administrative document 
used by EU members. 
 
STANDARDS, TESTING, LABELING AND CERTIFICATION 
 
The registration processes for pharmaceutical products and 
for drug pricing and reimbursement, including the process by 
which the National Health Insurance Fund classifies drugs, 
are cumbersome and non-transparent. Newer drugs are often 
arbitrarily classified with their older, generic versions 
for pricing purposes, thereby limiting companies' ability to 
recover their research and development costs. 
 
Although the Bulgarian Drug Agency (BDA) has made 
progress in bringing the process of registration closer 
to the EU requirements, Bulgaria still requires batch 
control for each individually imported batch and does not 
allow for an inspection of the foreign production site. 
 
Today U.S. and other foreign pharmaceutical companies 
consider that Bulgarian pricing and reimbursement decisions 
are not based on objective and verifiable criteria as 
required by WTO and EU principles.  In addition, no appeal 
procedures for government pricing and reimbursement 
decisions and no timeframes for reimbursement are provided 
in the Bulgarian law. 
 
The Bulgarian price approval system hampers the ability 
of foreign companies to compete effectively, as the 
regulations impose the lowest registered price of the 
EU member states and do not allow companies to recover 
importation costs. In addition, price regulations 
provide for a tacit refusal of reimbursement, which is 
against EU legislation.  Bulgaria's bureaucratic 
reimbursement process requires multiple approvals, lacks 
objective criteria, and does not provide for an appeals 
process. 
 
Health care providers and pharmaceutical industry 
representatives criticize the government's prescription drug 
coverage policy for its complicated and lengthy selection 
process, inappropriate criteria, inconsistent methodology, 
and susceptibility to corruption. 
 
The Bulgarian government's drug supply mechanism constitutes 
a major market access barrier to pharmaceutical companies' 
exports.  Under the new drug legislation, pharmaceutical 
companies are required to commit to pay any liquidated 
damages in case a distributor fails to supply the right 
medicine.  Thus, the burden of responsibility for 
distributors is being shifted from the government to the 
pharmaceutical industry. 
 
GOVERNMENT PROCUREMENT 
 
Bulgaria is an observer but not a signatory to the WTO 
Agreement on Government Procurement (GPA). In its accession 
to the WTO, Bulgaria committed to accede to the GPA and to 
submit an offer by June 1997 and complete negotiations by 
December 1997.  However, the Bulgarian government did not 
initiate the process for GPA accession until 2000, and has 
not yet submitted an offer. Upon its accession to the 
European Union, Bulgaria will be required to comply with the 
GPA. 
 
Although Bulgaria's government procurement legislation 
underwent a substantial reform in 2004 to align the system 
with WTO and EU rules, bidders still complain that tendering 
processes are unclear - and subject to irregularities and 
corrupt practices, and court appeals are long and 
cumbersome. 
 
Even though the goal of the 2004 Public Procurement Law was 
to introduce a more efficient, transparent and accountable 
system for public procurement, the business community 
considers it deficient in a number of areas.  The law 
transferred procurement appeals from the administrative to 
the civil procedure and introduced an Arbitration Court 
under the Ministry of Economy and Energy. This quasi- 
arbitration is not popular among businesses, because out-of- 
court dispute resolution is new to Bulgaria and because all 
bidders have to agree to join the arbitration. However, the 
biggest obstacle stems from the fact that an appeal that is 
essentially administrative is to be resolved through a civil 
procedure. 
 
The Bulgarian government has prepared amendments to the 2004 
Public Procurement Law in order to incorporate new European 
legislation in the area of public procurement and further 
streamline the national procurement process.  The law, 
however, offers little in the area of court appeals and has 
yet to be approved. 
 
The Bulgarian government supported by the US Government 
succeeded in energizing the state Public Procurement Agency. 
Its management capacity and communication with businesses 
and the judiciary has increased significantly over the last 
year. However, its capacity to provide methodological 
guidance to government and essential non-central government 
entities such as hospitals, universities, municipalities, 
etc. is not sufficiently developed. 
 
Defense procurement activities are subject to a lack of 
transparency and corrupt influences, and fail to comply with 
international standards.  The purchasing, pricing, and 
reimbursement processes for drugs under Bulgaria's national 
health system are not transparent. The government can use 
the price-approval mechanism to regulate the market for any 
product, and bureaucratic barriers can limit patients' 
access to new products. 
 
Government procurement practices in the energy sector appear 
to disadvantage foreign insurance companies.  According to 
U.S. industry, procedures for awarding insurance contracts 
for companies within the energy sector are not transparent. 
 
INTELLECTUAL PROPERTY RIGHTS (IPR) PROTECTION 
 
In May 2004, Bulgaria was placed on the Special 301 Watch 
List for the first time in five years. The 2005 US 
government inter-agency review retained Bulgaria on the 
Watch List. Over the past few years, there has been a steady 
resurgence of piracy, mainly in the sale of pirated optical 
disc media (ODM).  Today, the level of open and massive 
music piracy and copyright crime on Bulgaria's domestic 
market is unacceptably high and enforcement at all levels is 
inadequate.  Although industry's forensic evidence indicates 
that pirate facilities are operating once again in Bulgaria, 
the Bulgarian authorities have not adequately recognized or 
addressed the possibility of piracy production. 
Furthermore, Bulgaria is still widely used for transshipment 
of pirate CDs from Ukraine and Russia to the Balkans, 
Greece, and Turkey.  CD-R piracy has been increasing 
significantly, and the local music business in particular is 
feeling the brunt of this phenomenon. 
 
Although Bulgarian IPR legislation is generally adequate--it 
includes modern patent and copyright laws and criminal 
penalties for copyright infringement--industry 
representatives believe effective IPR protection requires 
improvements in certain pieces of legislation, including the 
Penal Code and the Penal Procedure Code. 
 
Parliament approved in September 2005 the long awaited Law 
on Administrative Control over the Manufacture and 
Distribution of ODM, which now requires SID codes on blank 
optical discs (OD) produced in Bulgaria and strengthens the 
import/export regime for raw materials and equipment 
involved in the ODM production.  However, the new law does 
not allow the right holders' organizations and their 
representatives to participate in the inspections and 
excludes from the registration regime goods in transit, 
which sets the stage to transform Bulgaria into a transit 
and dispatch center of pirate production from manufacturing 
countries (e.g. Russia., Ukraine,) to other territories. 
 
The new ODM law further weakens enforcement by restricting 
the authorities of state officials.  State control bodies 
are not allowed to require inspection of the manufacturing 
facilities in operation, to seize copies of documents 
(contracts, raw material supply contracts, etc.),  to 
require and seize samples of the inspected carriers and to 
seize raw material, manufacturing equipment, matrices, 
samples or ready product and documentations with the purpose 
of establishing facts and circumstances related to the 
inspection. 
 
Yet another major drawback of the new ODM law is that 
persons who furnish forged documents or documents with false 
content are not being held liable. 
 
The ODM law also introduces several requirements that have 
the potential to create serious trade barriers, according to 
industry representatives.  The law requires that all ODs 
containing sound recordings or films and other audiovisual 
works imported to Bulgaria have a SID code which is 
practically impossible as in developed countries SID codes 
are not required. 
 
Parliament is currently debating amendments to the 1993 Law 
on Copyrights and Related Rights, which will align 
Bulgaria's copyright legislation with the European 
requirements.  In particular, the proposed amendments will 
implement two directives of the EU in the area of 
copyrights: Directive 2001/84/EC of the European Parliament 
and of the Council on the resale right for the benefit of 
the author of an original work of art; and Directive 
2004/48/EC of the European Parliament and of the Council on 
the enforcement of intellectual property right.  Also, the 
amendments will establish the mechanism regulating the 
administration of the newly-established database and 
copyright information sharing system sponsored by the EU. 
 
Despite some successes by individual agencies, enforcement 
greatly suffers because of the lack of overall coordination 
between agencies and inadequate resources and legal 
loopholes.  The government lacks sufficient institutional 
capacity and will to effectively address major enforcement 
problems, especially in combating and prosecuting organized 
crime groups. 
 
Software piracy continues to be a serious problem, although 
industry legalization/enforcement campaigns have made 
noticeable gains against unauthorized software. Local 
software industry representatives report that, along with 
good cooperation from Bulgarian law enforcement authorities, 
the piracy rate has been contained to 71 percent of the 
products in the market in 2004.  The amount of lost revenues 
due to piracy, however, has increased by 27 percent, from 
USD 26 million in 2003 to USD 33 million in 2004.  The lack 
of actual prosecutions and court decisions has kept the 
piracy rate at a high level. Between October 2004-October 
2005 only five criminal and one civil judgment have been 
ruled by the Bulgarian judiciary, but the verdicts against 
the offenders are inadequate and non-deterrent. 
Distribution of unlicensed software on computers continues 
and it is becoming increasingly difficult to effectively 
address this problem as computer resellers install 
unlicensed software at the customers' premises. Also, the 
domestic market offers enormous amounts of illegal CD-ROMs 
containing a full range of different pirated software. 
Internet distribution of illegal software is also a growing 
problem. 
 
The US government has formulated an action plan, which will 
assist in focusing attention on immediate and effective 
implementation of the new Optical Disk Media (ODM) Law and 
the amended Copyrights and Related Rights legislation, 
enforcement actions and ministerial-level coordination, 
designing training programs and improving efforts to address 
counterfeiting of U.S. spirits. 
 
The Bulgarian government included in its 2003 drug law a 
provision to provide protection for confidential test data 
submitted for marketing approval by pharmaceutical products 
companies. The law, however, links data protection to a 
valid patent. Bulgaria joined the European Patent Convention 
on July 1, 2002 and has obtained observer status in the 
Administrative Council of the European Patent Organization. 
 
The Association of American Pharmaceutical Companies 
in Bulgaria (AAPCB) has told us that the Bulgarian 
government's practice of shortening the patent life of 
innovative medical products in violations of the Bulgarian 
patent legislation and the TRIPS Agreement could constitute 
a major barrier for their exports to Bulgaria and 
investments.  The industry has reported that in several 
cases generic copies of the original drugs have been granted 
marketing authorizations, registered retail price and 
applied/received access to reimbursement prior to expiration 
of the patent of the original pharmaceutical product. 
 
Industry has told us that the Bulgarian government's 
inability to protect trademarks is a significant barrier to 
investment and legitimate domestic economic development. 
U.S. businesses have noted significant difficulties in 
obtaining relief against trademark infringement. Even if 
courts understand the law and issue orders, the entities 
charged with enforcement often cannot be relied upon to 
carry out the court judgment. Under Bulgarian law, legal 
entities cannot be held criminally liable. Therefore, the 
criminal penalties for copyright infringement and willful 
trademark infringement are limited. 
 
There is evidence of significant counterfeit production in 
Bulgaria and illegal import of counterfeited U.S. brand 
distilled alcoholic spirits. Some spirits companies have 
estimated that almost 10 percent of the products sold in the 
Bulgarian market may be counterfeit. 
 
SERVICES BARRIERS 
 
As in other EU candidate countries, Bulgaria's 1998 Radio 
and Television Law requires a "predominant portion" of 
certain programming to be drawn from European-produced works 
and sets quotas for Bulgarian works within that portion. 
This requirement, however, is only to be applied to the 
extent "practicable." Foreign broadcasters transmitting into 
Bulgaria must have a local representative, and broadcasters 
are prohibited from entering into barter agreements with 
television program suppliers. 
 
INVESTMENT BARRIERS 
 
The U.S.-Bulgaria Bilateral Investment Treaty (BIT) took 
effect in 1994 and provides guarantees for U.S. investors of 
both national and MFN treatment, the right to make financial 
transfers freely and without delay, international law 
standards for expropriation and compensation, and access to 
binding international arbitration.  In 2003, to address 
several actual and potential incompatibilities between BIT 
obligations and EU law, the United States exchanged 
interpretive notes with the governments of Bulgaria and 
seven other European countries expected to join the EU over 
the next few years. The United States and the prospective EU 
Member States also agreed to make several narrow amendments 
to the texts of the relevant BITs. Both the United States 
and Bulgaria have ratified the BIT amendments, but the 
amendments will not enter into force until Bulgaria joins 
the EU. 
 
The 2005 property rights constitutional amendment, which 
comes into effect on January 1, 2007 and will lift the 
existing ban prohibiting foreigners to buy land in Bulgaria, 
favors EU over U.S. investors. While EU citizens and 
entities will be allowed to acquire property directly by 
virtue of Bulgaria's accession treaty, all other foreigners 
will be able to do so only on the basis of an international 
agreement ratified by the Bulgarian Parliament. In the 
meantime, the constitutional prohibition against ownership 
of land by foreign individuals remains in force. However, 
foreign-owned companies registered in Bulgaria are 
considered to be Bulgarian persons. U.S. owned companies 
that register in Bulgaria therefore may acquire land in 
Bulgaria. 
 
Local companies in which foreign partners have controlling 
interests must obtain prior approval (licenses) to engage in 
certain activities: production and export of 
arms/ammunition; banking and insurance; exploration, 
development, and exploitation of natural resources; and 
acquisition of property in certain geographic areas. There 
are neither specific export-performance requirements nor 
specific restrictions on hiring expatriate personnel, 
although residence permits are often difficult to obtain. 
 
A recent Bulgarian law eliminated the withholding tax on 
dividends for European investors, but U.S. investors face a 
withholding tax of 15 percent. 
 
FOREIGN TRADE BARRIERS 
 
New insolvency rules in Bulgaria's Commercial Code and its 
Law on Public Offering of Securities have greatly improved 
the legislative protection for minority shareholders. 
However, enforcement of the law's provisions is inadequate 
and corporate governance remains weak. 
 
In 2003, Parliament approved a new Telecommunications Law 
which increases institutional and regulatory liberalization 
of the Bulgarian telecommunications sector but focuses more 
on institutional issues and the protection of state 
interests than on greater market liberalization. The new 
Telecommunication Act extended until December 2005 the 
Bulgarian Telecommunications Company's (BTC) control over 
the sole telecommunication network. 
 
A June 1999 law regulating gambling imposes additional 
requirements on foreigners organizing games of chance. 
Foreigners can receive a license to establish a casino in a 
hotel only if they satisfy one of the following conditions: 
(1) purchase or construction of a hotel rated four-star or 
higher; or (2) investment of at least $10 million and 
employment of at least 500 workers in economic activities 
unrelated to gambling. 
 
According to U.S. businesses, other steps needed to improve 
the environment for foreign investment include improved 
creditor rights through improvements to bankruptcy law and 
procedures; reform of the judicial system; improved 
accounting standards and risk assessment; reform of the 
energy sector; and transparency and accountability in public 
policy to reduce the perception of corruption. 
 
ELECTRONIC COMMERCE 
 
Bulgaria's Law on the Electronic Document and Electronic 
Signature went into effect in 2001. Three implementation 
ordinances for this law aimed at improved access to 
information services and promotion of electronic commerce 
were approved in 2002: Ordinance on Requirements for 
Algorithms for Advanced Electronic Signature; Ordinance for 
Activity of Certification-Service-Providers, Termination 
Procedure, and Requirements for Provision of Certification 
Services; and Ordinance for the Order of Registration of 
Certification-Service-Providers. 
 
OTHER BARRIERS 
 
Selective enforcement 
Foreign investors complain that tax evasion by private 
domestic firms combined with the failure of the authorities 
to enforce collection from large, often financially- 
precarious, state-owned enterprises places the foreign 
investor at a disadvantage. The multiplicity of Bulgarian 
licensing and regulatory regimes, their arbitrary 
interpretation and enforcement by the bureaucracy, and the 
incentives this creates for corruption, have long been seen 
as an impediment to investment, private business development 
and market entry. The 2003 Restriction of Administrative 
Regulation and Control of Economic Activity Act is expected 
to considerably lighten the potential of regulatory abuse at 
all levels of government, and when implemented, should 
improve the overall business environment. 
 
Execution of judgment 
 
Bulgarian and foreign observers caution that the proceedings 
for the execution of judgments under the Code of Civil 
Procedure remain slow and unpredictable. Also, the civil 
servants who are currently responsible for carrying out 
execution are viewed as extremely inefficient. Thus, 
problems are procedural, as well as systemic. Further reform 
of the legal framework and its implementation will be 
needed. In May 2005, Bulgaria addressed the systemic issues 
by adopting the Private Execution Agents Act, which created 
private execution agents to work in parallel with the state 
officials. The private execution agents are expected to 
become operational in 2006. However at this early stage of 
reform it is unclear whether it will be able to effectively 
address the current problems. Procedural impediments to 
execution of judgments still remain to be addressed through 
amendments to the Code of Civil Procedure. 
 
The U.S. does not currently have reciprocity with Bulgaria, 
so Bulgarian courts are not obliged to honor decisions of 
U.S. courts. In practice, enforcement of foreign judgments, 
as well as their execution, is subject to delays, sometimes 
resulting from corruption and inefficiency in the judicial 
system. 
 
Access to international arbitration 
 
There are opportunities for international arbitration in 
Bulgaria.  The Code of Civil Procedure mandates that foreign 
court of arbitration is possible only if at least one of the 
parties has its seat or residence abroad. As a result, 
foreign-owned, Bulgarian-registered companies having a 
dispute with a Bulgarian entity can only have arbitration in 
Bulgaria. However, under the Law on the International 
Commercial Arbitration, the arbitrator himself could be a 
foreign person. Under the same act, the parties can agree on 
the language to be used in the arbitration proceedings. The 
major and most experienced arbitration institution is the 
Arbitration Court of the Bulgarian Chamber of Commerce and 
Industry (BCCI). 
 
Not all disputes, however, may be resolved through 
arbitration. Disputes regarding rights over real estate 
properties in the country or labor disputes can only be 
heard by the courts. Additionally, Bulgarian courts have 
exclusive competence over industrial property disputes 
regarding patents issued in Bulgaria. 
 
Bulgaria is a party to the Convention on the Recognition and 
Enforcement of Foreign Arbitral Awards (the New York 
Convention), which facilitates enforcement of foreign 
arbitral awards. However, having gone through the 
enforcement proceedings before the Bulgarian courts, the 
creditor needs then to execute the award using the general 
framework for execution of judgments in the country, which 
is inefficient. 
 
Mediation 
 
Businesses wishing to use mediation to solve their disputes 
in Bulgaria may find it hard to select experienced 
mediators. This service has just started to develop in the 
country following the adoption at the end of 2004 of the 
Mediation Act. BCCI and the American Chamber of Commerce 
(AmCham) responded promptly by opening commercial mediation 
centers. The mediators at these centers have been trained 
with US assistance but at this point lack sufficient 
experience to be able to provide high quality mediation 
services. 
 
Textiles and apparel 
 
As of January 1, 2002, Bulgaria eliminated all tariffs for 
industrial imports from the EU under its association 
agreement with the European Union, including textiles and 
apparel. Under Protocol One on Textile and Clothing Products 
of the European Agreement, the EU eliminated quotas on 
textile and clothing products originating in Bulgaria on 
January 1, 1998, and eliminated tariffs on textile and 
clothing products on January 1, 1997. Bulgaria levies 
tariffs on textile and apparel from the United States, but 
does not impose any quantitative restrictions (quotas) on 
imports from the United States. 
 
BEYRLE