Citizenship Criminal law Scams

Applying for Bulgarian citizenship – the legal caveats

It’s obvious that the main goal of each and every applicant for Bulgarian citizenship is to get approved. On top of that, all applicants hope to get approved a.s.a.p. This is logical and understandable. Unfortunately, more and more would be Bulgarians are cutting some very important corners throughout the application process. Most of them don’t really realize that, as the Bulgarian legal system is unknown to them. Unfortunately the consequences can be harsh, really harsh.

What are the most common problems behind the rejected citizenship applications

In the last year we have been contacted by alarming number of clients who had their Bulgarian citizenship application stuck or rejected. What took us by surprise was not the big increase in rejected applications, but the fact that it was the applicants’ own fault in most cases.

So what did the applicants do so terribly wrong to have their citizenship applications grounded? And are there an other consequences for them, besides the rejection of the application.

We will list below the five most frequent reasons that we have encountered:

  1. Application for citizenship by origin with false certificate for Bulgarian origin – 41%;
  2. Citizenship by investment with exotic “investment” arrangements – 22%;
  3. Untrue declaration(s) during the naturalization procedures – 20%;
  4. Criminal or otherwise unclear (hard to verify) history record of the applicant – 6%;
  5. Sham marriages – 4%.

The harsh consequences – the Bulgarian Penal Code

The problem with most of the rejected applications was that the candidates have become victims of their ignorance of the Bulgarian legal system. Not only their citizenship was not approved, but in many cases, it was much worse. The Bulgarian authorities were investigating the provided documents and in some cases were planning to launch criminal proceedings.

Let’s sum up what the potential problems were for each of the above five categories.

False certificates for Bulgarian origin

In this category are falling mostly clients from Macedonia, Albania, Ukraine and Moldova. They were all victims of the unscrupulous internet “agents” who have lured them with the false promise that “everyone from their region is considered to be Bulgarian“. With low fees and “full guarantees”, the clients have signed up for the fake Bulgarian origin schemes. Consequentially they have been provided with fake certificates of Bulgarian ancestry.

And once these certificates, or other supporting documents, were used in Bulgaria, the applicants have committed criminal offence.

Whoever draws up a false official document or alters the content of an official document in order to be used, shall be punished for forgery of a document with imprisonment of up to three years.

Art. 308. (1) from the Penal Code

Whoever, alone or through another, draws up a false private document or alters the contents of a private document and uses it to prove that it exists or does not exist or that a right or obligation or a legal relationship has been terminated or amended shall be punished for falsifying a document with imprisonment of up to two years.

Art. 309. (1) from the Penal Code

Exotic financial schemes for citizenship by investment

The legal way to obtain citizenship by investment

As you all know, the Bulgarian citizenship by investment program requires an amount of either 512 000 EUR or 1 024 000 EUR to be invested in Bulgarian Eurobonds, stock-exchange-listed shares, etc. Unfortunately, as many citizenship enthusiasts don’t have such net-worth, they aggressively seek other “investment alternatives”. These are mainly the options to use credit facility in order to buy the bonds/shares on “margin”, thereby using the investment as collateral in order to finance it. It pretty much works like mortgaging your home. While this is legal, the government isn’t found of these practices.

The illegal “financial investments”

What the real problem is, is that some “agents” have invented all sort of “derivative” ways to circumvent the legal requirement to invest 512000 or 1024000 EUR. Instead of trying to arrange straightforward financing of the investment, they gave birth to all sort of “exotic financial arrangements”. Such “arrangements” are usually very beneficial for the “agents” as the citizenship applicant is basically left with worthless portfolio of junk “instruments”. These “instruments” or “investments” can be hardly resold (liquidated) for anything that comes even close to the amount they were purchased for. Such can be “investments” in “offshore insurance products”, real estate developments, offshore private equity, “startups”, unrated bonds, IPO’s, ICO’s, Ethereum, Bitcoin, etc.

False declaration and tax evasion

The main problem with such schemes is not only that they are a way to circumvent the investment criteria of the citizenship laws. Such circumvention is not immediately a criminal offense (in fact, this is not an offense at all, if done rightfully). Unfortunately however, in order for these schemes to work, the client is asked to sign a bunch of documents (contracts, declarations, credit or ease agreements, etc.) that very often fall in the category of “untrue declaration”. Many times, these also circumvent the tax laws in Bulgaria, which is punishable by the penal code.

As a rule of thumb, if you haven’t invested the full amount, required for the Bulgarian CIP and you don’t have a clear and straightforward credit agreement with reputable financial institution (ie bank), then you better contact your trusted lawyer.

Whoever confirms untruth or conceals truth in a written declaration or message sent electronically, which by virtue of a law, decree or decree of the Council of Ministers are given to a public authority to certify the truth of certain circumstances, shall be punished by imprisonment of up to three years or with a fine of one hundred to three hundred levs.

Art. 313 from the Penal Code

Whoever avoids establishing or paying more than 1534 EUR of tax liabilities, …. shall be punished by imprisonment of one to six years and by a fine of up to two thousand levs…
When the tax liabilities exceed 6136 EUR, the penalty is imprisonment for three to eight years and confiscation of part or all of the property of the offender.

Art. 255 from the Penal Code

False (untrue) declaration, shady past of the applicant and fake marriages

This is, as stated above, punishable under art 313 of the penal code.

Foreigners married to Bulgarian citizens need to sign declaration, that the marriage is not a sham marriage with the purpose to circumvent the immigration laws.

Declarations are also needed for the applicant’s past, criminal history, etc. Failure to provide accurate information may be punishable under art.313.

What to do if you believe you may have done something wrong during your citizenship application?

First of all, don’t panic. It is not always that if any of the scenarios above apply to you, you will be criminally prosecuted. In many cases, the authorities don’t dig too deep to start investigation.

Secondly, try to collect all documents that you have filed and signed to have them for your reference. If you find any serious irregularities, consult your trusted lawyer or liaise with us for assistance.

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