Decision No. 11 of 10 July 2014 on Constitutional Case No. 2/2013
The case was instituted on 15 January 2013 upon a 4-part request filed by 61 Members of the 41st National Assembly who asked for a binding interpretation on Art. 120, para 2 read in combination with Art. 56 and Art. 57 of the Constitution of the Republic of Bulgaria and pleaded for: the declaration of either full or partial incompatibility with the Constitution of 25 provisions of the Waste Management Act (WMA); the pronouncement of the partial noncompliance of Art. 82, para 2 of the WMA with the Treaty on the Functioning of the European Union (TFEU) to which Bulgaria is a signatory party.
Proceedings under Art. 149, para 1, items 1, 2 and 4 of the Constitution of the Republic of Bulgaria.
A resolution of 10 July 2014 detached the request for interpretation to treat it on its own, so the decision covers only the rest of the claims.
І. 1. The MPs insist that Art. 77, para 2, Art. 80, para 4, Art. 93, para 2, Art. 108, sentence 2 and Art. 129, para 5, sentence 2 of the WMA disagree with Art. 120 and Art. 56 read in combination with Art. 4, para 1 and Art. 8 of the Constitution since the anticipatory enforcement that the cited texts provide for confront enterprises with difficulties that are incommensurate with the objective of the administrative acts and that would disturb the enterprises’ operations to an extent of bankruptcy; anticipatory enforcement is practically non-appealable without a priority defined as „an interest or a value that is significant, common and universal and therefore legally foreseeable“ to compensate for the „cancelled“ right to protection; the anticipatory enforcement, if allowed, will generate conditions that conduce to abuse of power and to corruption; protection under Art. 166, para 4 of the Administrative Procedure Code (APC) against anticipatory enforcement that the law allows is not equivalent to the protection against anticipatory enforcement that may be ordered by an administrative body under Art. 60 of the APC.
2. In addition to the reasons regarding anticipatory enforcement and valid for Art. 82, para 6 of the WMA, the MPs believe that Paragraph 8 of this Article is in contravention of Art. 57, para 1 of the Constitution and of Art. 1 of the First Additional Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms (ratified by the National Assembly by a ratification act, DV, No. 66/1992, last amended, DV, No. 38/2010) since the text under consideration does not provide for the recovery of the civil fruit deriving from the guarantee in the interval from the withdrawal to the recovery of that guarantee and thus infringes on the right to property and on the principle of the state committed to the rule of law as per Art. 4, para 1 of the Constitution of the Republic of Bulgaria which principle, in the MPs’ understanding, precludes „unjust enrichment…“ especially when a law provides to that effect.
3. The MPs claimed that Art. 39, para 3 of the WMA conflicts with Art. 4, para 1, Art. 17, paras 1, 3 and 5, Art. 19, para 2 and Art. 55 of the Constitution. To place individuals who own scrap (hereinafter termed FNFMW – Ferrous and Non-Ferrous Metals Waste) under the obligation to dispose of it (to dump it) without being paid for and only onto dumping sites that are opened and run by the mayor of the municipality constitutes an infringement on Art. 17, paras 1, 3 and 5 of the Constitution that treat the form of ownership. As the obligation deprives such owners of the option to sell their scrap metal at market prices, practically the text sanctions „forcible expropriation of property“ with no urgent state or municipal need to be met and against no compensation. In addition, the text under consideration conflicts with Art. 19, para 2 of the Constitution as it shuts the FNFMW market to any legal entity but municipalities that enjoy this privileged treatment in defiance of the Constitution; the text allows the municipalities to obtain scrap without payment for it but does not disallow them to proceed to sell it. In the long run the disincentive will lead to the proliferation of unlicensed FNFMW dumping sites and to pollution of the environment and thus will defy Art. 55 of the Constitution.
4. The MPs claimed that Art. 19, para 3, item 11 of the WMA places the local self-government bodies and the municipalities in a position of inequality as it encroaches on the right of citizens in small municipalities to discharge their WMA obligations in the jurisdictions of their respective municipalities and burdens them with transportation costs if they are to dump their scrap onto sites that are run by larger municipalities. In addition, the residents in larger municipalities will incur higher local waste charges while the residents in smaller municipalities will pay higher disposal-related costs. The MPs found the criterion „size of population“ to be just as vague since it fails to adequately measure the amassed quantities of ordinary waste.
The MPs think that Art. 19, para 5 of the WMA subjects to discrimination the residents of large municipalities who ultimately are to pay a fine that the text in question provides for and to pay a higher fine at that. Furthermore, two penalties are imposed on one and the same offense as the mayor of the municipality is held responsible by a second WMA text – Art. 151, para 2, item 14.
The MPs think that Art. 19, para 3, item 7 of the WMA is discordant with its Art. 14, para 1 concerning the liability of a manufacturer whose output generates waste as the manufacturer’s liabilities are converted into costs that the residents of the municipality have to pay in defiance of the principle Qui habet commoda, ferre debet honera (He who takes the benefits, must bear the burdens).
The MPs insist that the three contested texts from Art. 19 of the WMA are incompatible with Art. 4, para 1 of the Constitution.
Further, the legal texts below are likewise seen as incompatible with Art. 4 para 1 of the Constitution:
- Art. 82, para 9 of the WMA regarding the words „the terms and conditions“. The MPs insist these are basic primary social relations and as such they shall be subject to law regulation. To vest the Council of Ministers with the power to enact the regulation is to betray the principle of the separation of powers and to fall foul of the Constitution – its Art. 4, para 1 and Art. 8.
- Art. 88, para 2, item 4 and Art. 90, para 6 of the WMA. The MPs find the reason given for the termination of a permit to be non-appealable as it is not to be found in Art. 93 of the WMA and thus infringes on the Constitution-enshrined right to legal defense; the MPs think that the use of a juristic formula that is inadmissible in democratic law is the disguise of a termination modality where the subjects of law are no longer on a par; the MPs think that unjustified and unfounded administrative regulation is enacted; the MPs find it is unacceptable to edge acquired rights out; the MPs believe it is absurd that a refusal should be rewarded with a bonus in the form of an opportunity to reapply.
- Art. 91, para 1, item 1 of the WMA. The MPs find the text unconstitutional on account of ambiguities and controversies of the regulation since the reasons for the withdrawal of a permit are not clearly and precisely distinguished.
- Art. 91, para 1, item 2 and para 2, item 3 of the WMA. The MPs claim that the hypotheses of these two provisions for the withdrawal of a permit overlap with the hypotheses in Art. 82, para 3, items 2 and 3 of the WMA concerning the withdrawal of a bank guarantee but have different implications: the former two provisions provide for full withdrawal of a bank guarantee and the latter two provide for partial withdrawal and by doing so compromise the principle of the law-governed state, i.e. the principle of the homogeneity, coherence and inner consistency of any legal regulation.
- The MPs insist that the responsibilities of the users of retail premises, industrial and business buildings and offices collide with the responsibility of the mayor of the municipality under Art. 19, para 3, items 6, 9 and 10 of the WMA and that such responsibilities should be equally valid for waste producers in populated areas with a population of 5000 and below. Therefore, the MPs find the WMA’s Art. 33, para 3 and para 4, the words „in populated areas as per Paragraph 1“ to be inconsistent with Art. 4, para 1 and Art. 19 of the Constitution.
The MPs find Art. 38, para 4 and the related Art. 75, para 2, item 3 and Art. 145, para 1, item 11 of the WMA to be inconsistent with Art. 4, para 1 and Art. 19 of the Constitution. The text of Art. 38, para 4 of the WMA, viz. that payments for transactions with FNFMW shall be carried out using a cashless mode conflicts with Art. 3, para 1, item 1 of the Limitation of Cash Payments Act (DV, No. 16/22 February 2011, amended, No. 109/20 December 2013; LCPA), and moreover, the former act is not a piece of special legislation but the latter is. In the MPs’ understanding the requirement, as it is, discriminates some economic actors against others who are involved in FNFMW business and the sanctions for omissions are excessive to an extent where they cease to be reasonable.
The reason for contesting Art. 22, para 1 of the WMA concerning the words „terms and conditions“ and Art. 22, para 2 of the WMA concerning the words „the conditions for registration of sites, as well as the conditions for submission of waste to sites referred to in Art. 19, para 3, item 11“ is the concept that waste activities should be subject to a statutory instrument of the Council of Ministers which is the central body of the Executive and as such has a general competence rather than to municipal councils’ ordinances if the regulation is to be identical everywhere countrywide.
The contested Art. 69, para 2 of the WMA, viz. the words „shall enclose with the application referred to in Art. 68“ a bank guarantee in the amount of 25,000 with any Regional Inspectorate of Environment and Water (RIEW) under whose jurisdiction the licensed FNFMW site is, is seen as a property hurdle to an extent where it becomes a disincentive.
These provisions are also alleged to be in confrontation with Art. 4, para 1 and Art. 19 of the Constitution.
ІІ. The MPs find the words „court registration in the Republic of Bulgaria“ and „licensed by the Bulgarian National Bank“ in Art. 82, para 2 of the WMA to be in conflict with Art. 56 of the TFEU as the quoted phrases, in defiance of the Treaty which is an international instrument, preclude the possibility for banks in an EU Member State to issue bank guarantees, either directly or through the operation of their branch in the territory of the Republic of Bulgaria.
ІV. The Constitutional Court considered the evidence concerning the case and the argumentation of the challenge and judged as follows:
On the challenge of the constitutionality of WMA provisions.
І. On the alleged noncompliance with the Constitution of Art. 77, para 2, Art. 80, para 4, Art. 93, para 2, Art. 108, sentence 2 and Art. 129, para 5, sentence 2 of the WMA that allow anticipatory enforcement under the WMA.
1. The Constitution does not give a definition of the notion „anticipatory enforcement“ of acts that are an umbrella that covers administrative acts, among all other. Yet the substance of the notion may be deduced from Constitution provisions and from texts in the existing legislation.
Art. 31, para 3 of the Constitution reads that a defendant shall be considered innocent until proven otherwise by a final verdict. Art. 72, para 1, item 2, Art. 129, para 3, item 3, Art. 130, para 8, item 2 and Art. 148, para 1, item 3 imply a final verdict or a judicial act that are the basis upon which the respective mandate is withdrawn. Art. 90, para 1 of the Administrative Procedure Code (APC) reads that the administrative acts shall not be enforced prior to the expiry of the time limits for the contestation thereof or, where an appeal or a protest has been lodged, until a resolution of the dispute by the relevant authority. Art. 268, item 1 of the APC reads that individual or general administrative acts which have entered into effect or are subject to anticipatory enforcement, shall be enforcement titles under this Code. Art. 153, para 1 and Art. 157, para 1 of the Tax and Social Insurance Procedure Code (TSIPC) decree that an administrative or a judicial appeal of the audit instrument shall not stay the enforcement of the said act. Art. 404, item 1 of the Code of Civil Procedure (CCP) reads thus: The following shall be subject to coercive enforcement: the effective judgments and rulings of the court, the adverse judgments of the intermediate appellate review courts, the enforcement orders, the memoranda on court settlement, the judgments of enforcement and enforcement orders which are subject to or are admitted to anticipatory or immediate enforcement. Art. 202, para 1 and Art. 343 of the Criminal Procedure Code (CPC) reads thus: Appeals shall not stay the execution of the appealed decree that has been issued by a pretrial authority or the execution of the appealed ruling that has been handed down by a court.
The conclusion that the quoted texts lead to is that anticipatory enforcement applies to a public law (administrative or judicial) act and applies prior to the act’s entry into effect, i.e. before the act becomes non-appealable. The enforcement of an act barred prior to the expiry of the time limits for the appeal thereof guarantees the ultimate goal of the legal defense that the appellant seeks, viz. the preclusion of the unlawful occurrence of the legal effects that the act decrees. Therefore anticipatory enforcement will render the guarantee disempowered.
2. а. The Constitution does not contain texts that may intrude into the Legislature’s power to codify the anticipatory enforcement of acts that are appealed against. Art. 7 of the Constitution guarantees that the State will be liable for any damages caused by illegitimate rulings or acts on the part of its agencies and officials. The first four of the provisions challenged allow for the anticipatory enforcement of rulings (regardless of which the successful or unsuccessful party is) on the license, registration and transborder transportation of waste whereas the fifth provision allows for coercive administrative measures. All five provisions set forth nonstatutory administrative acts. The Constitution does not make their anticipatory enforcement conditional on any restriction.
b. Anticipatory enforcement is irrelevant to the admissibility or tenability of the appeal against an act that is perceived as unlawful. In juristic terms the conformity of an administrative act with the substantive law shall be assessed at the time of issuance of the said act (аrg. Art. 6, para 2 of the Constitution and Art. 14 of the Statutory Instruments Act /SIA/; Art. 142 of the APC), no matter whether the legal effects of the act have occurred and when they have occurred. Therefore anticipatory enforcement is inconsequential for the Constitution-proclaimed right to legal defense.
c. These two reasons in the perspective of the Constitution rendered meaningless the developed arguments against the causes, criteria, appealability and consequences of the anticipatory enforcement of administrative acts as provided for in the legislation. The judgment of the arguments lies within the domain of legislative intent.
The five challenged provisions are not unconstitutional.
ІІ. 1. These considerations are entirely valid for Art. 82, para 6 of the WMA which reads that payment under the bank guarantee shall be made irrespective of the appeal of the order concerning the payment of a product fee.
2. The provision of Art. 82, para 8 of the WMA concerning the reimbursement within 14 days of the amount paid under the bank guarantee when the act is repealed with an effective court ruling is not to be interpreted as exclusive of the owed civil fruit (the interest payable) on the amount thus paid. The purpose of the precept is to assess the principal to be repaid (the whole bank guarantee or a part thereof) and the date by which the repayment is to be made. The precept does not seek to provide for interests payable on the amount to be repaid. The interests payable are subject to law-established licenses that the precept in question does not explicitly exclude. Even being a special precept, it does not exclude the interests payable either as their hypotheses don’t concur. Inconsistence of the precept with Art. 4, para 1 and Art. 57, para 1 of the Constitution, as alleged, did not show up.
Therefore, the challenge of the constitutionality of this provision should be dismissed.
ІІІ. The challenged Art. 39, para 3 of the WMA reads that in the cases referred to in Paragraph 2 waste shall be submitted to sites referred to in Art. 19, para 3, item 11 or through campaigns for separate collection of waste from households organized by municipality mayors, free of charge for all parties.
Art. 39, para 2 of the WMA reads that natural persons may submit only household ferrous and non-ferrous metals waste where a declaration of origin is available. According to Art. 19, para 3, item 11 of the WMA the mayor of each municipality shall be responsible for the provision of sites for free-of-charge submission of separately collected waste from households, including large-scale waste, hazardous waste and other in all populated areas with a population of more than 10,000 people within the territory of the municipality and, where necessary, in other populated areas.
1. § 1, item 17 of the WMA reads thus: „Consumer ferrous and non-ferrous metals waste’ means ferrous and non-ferrous metals waste (FNFMW) generated from everyday activities of humans in residential, administrative, social and public buildings. This definition shall also encompass ferrous and non-ferrous metals waste generated at retail premises, service shops, and recreational and entertainment facilities.“ The legal definition does not change the legal status of waste as movable property that is owned by an owner. The title right shall be lost only if another person acquires it or if the owner renounces it – Art. 99 of the Ownership Act.
The ownership of natural persons over ferrous and non-ferrous metals waste is private regardless of whether it was acquired as a result of original or secondary conveyance, in good consideration or ex gratia. Art. 17, para 3 of the Constitution proclaims private property inviolable.
The title right is the broadest, in terms of substance, subjective real right. This right allows a title holder to handle the property in a way and under conditions that he deems best. The possible lines of conduct, traditionally, generally and provisionally are grouped in the three rights: possession, use and disposition (settlement). Disposition is any legal act of transferring or relinquishing property to another's care or possession.
The right to property is in counterpoint to all other subjects of law and is an absolute right when viewed from that perspective. Third parties, counting the State among them, shall abstain from any improper steps that meddle with the exercise of this right. By the proclamation of the inviolability of private property the Constitution rules out the possibility for anyone but the owner to relinquish or transfer assets except for the circumstances as per Art. 17, para 5 concerning the forcible expropriation of property in the name of State or municipal needs.
2. The provision challenged that reads that FNFMW shall be dumped free of charge onto approved sites only trims the right of an owner who is a natural person to freely get rid of household scrap (FNFMW) by the choice of a dumping site or a manner of disposal.
а. Art. 17, para 5 of the Constitution that treats forcible expropriation of assets and that is violated, as the MPs allege, is inapplicable. The provision does not make it binding on the owner to dump or to relinquish the scrap.
b. The provision of dumping sites for FNFMW (scrap) is not unconstitutional either.
Such a limitation of the title right is in agreement with Art. 55 of the Constitution that reads that citizens shall have the right to a healthy and favorable environment corresponding to the established standards and norms and with the duty of the waste owner to protect the environment. On its part the State shall ensure the protection and reproduction of the environment, the conservation of living Nature in all its variety, and the sensible utilization of the country’s natural and other resources – Art. 15 of the Constitution and to protect the health of citizens – Art. 52, para 3, proposition 1 of the Constitution.
The dumping sites for FNFMW do not determine the kinds of subjects of law who can operate on the sites, therefore, that part of the provision does not go, as alleged, against Art. 19, para 2 of the Constitution vis-à-vis the requirement of guaranteed equal legal conditions for economic activities.
c. Yet the part „free of charge for all parties“ is dissonant with Art. 17, para 1, proposition 1 and para 3 of the Constitution.
The Constitutional Court has already noted that the limitation of an owner’s fundamental right such as the act of transferring or relinquishing property to another's care or possession will trim and impinge on this right.
The entitlement per se of any natural person to enjoy his possessions, the FNFMW (scrap) in this particular case, does not meddle with the entitlement of third parties. The supposition that life experience may invite that in all times this right rests on an encroachment upon alien property is not based on hard facts. However, even if this was true, the legislative result that ensues is not legally sustainable. The Constitution-sanctioned nondiscrimination of entitlement rules out the prejudice against certain rights in favor of other rights, as the case is. The Legislature is bound to find a solution to the problem and the solution must be in tune with the Constitution-proclaimed principles and the citizens’ fundamental rights.
Alongside, the confinement of the right of natural persons who happen to own scrap to dispose of it while they are not paid for it is in collision with their duty to protect the environment. Such a limitation pushes away the incentive which is essential for the performance of the duty.
The challenge of the constitutionality of Art. 39, para 3 of the WMA in the part „free of charge for all parties“ is to be admitted as tenable and the rest of the text challenged is to be dismissed.
ІV. 1. The alleged noncompliance of Art. 19, para 3, items 7 and 11, and para 5 of the WMA with Art. 4, para 1 of the Constitution is unsustainable.
a. The challenged part of Art. 19, para 3, item 7 of the WMA reads that the mayor of the municipality shall be responsible for „organizing the operations for separate collection of ordinary waste …“ Art. 14, para 1 of the WMA reads thus: „Persons placing on the market products which, after use, form ordinary waste, shall be responsible for their separate collection and treatment, …“
First, the substance and scale of the two responsibilities differ. Those who generate waste are responsible for its separate collection and treatment. The mayor is not responsible for the separate collection and treatment of waste; the mayor is bound to arrange the administrative, legal and real setting for the separate collection and treatment of waste. The mayor’s responsibility is a standalone responsibility which goes before the generating agents’ responsibility and continues to exist even when the concrete generating agents are not yet or are no longer „on the scene“. Second, and essential, even if the two activities were identical, the Constitution does not forbid in any way to assign these activities to different subjects of law where each is bound to carry them out for which they use their own property. The legislation in force handles the property consequences among the subjects of law after the execution. That legislation is applicable without exception exactly in keeping with the principle of the state committed to the rule of law.
b. Art. 19, para 3, item 11 of the WMA concerning the municipality mayor’s responsibility for the provision of sites for free-of-charge submission of separately collected waste from households is contested with respect to the words „in all populated areas with a population of more than 10,000 people within the territory of the municipality and, where necessary, in other populated areas“.
The principle of justice („the substantive part“ of the principle of the state committed to the rule of law) has not been violated; on the contrary, the contested part of the provision honors that principle. With a criterion that it is the size of the population of the populated area (and not of the municipality, as insisted in the challenge) that provision does not forbid, just the opposite it permits to open sites in populated areas with a population below the said number (in resorts, for instance), whenever necessary. The alleged higher waste fees for places that host such sites are counterpoised by the dumping and transportation costs for populated areas that do not host such sites.
c. Art. 19, para 5 of the WMA reads that in case of noncompliance with the requirements of Paragraph 3, item 11 the deductions referred to in Art. 64 shall be increased by 15 percent for the period until the elimination of the instance of noncompliance.
Art. 64 of the WMA reads that these deductions shall be paid by the landfill owner to accumulate a resource for municipalities to meet the obligation that they assume under the primary and secondary (enabling) legislation. Such liability is financial liability and differs in terms of the liable entity and substance from the individual administrative sanction that may be imposed on the mayor of a municipality under Art. 151, para 2, item 14 of the WMA in the event of failure to perform his duty. The rule non bis in idem which is part of the principle of the law-governed state has not been violated.
The alleged payment by citizens to make up for the failure of a municipality to perform its duty ensures the assets for the fulfillment of this duty. In both cases the origin of the assets would be one and the same. The provision does not violate the principle of the state committed to the rule of law.
2. The alleged noncompliance of Art. 82, para 9 of the WMA with Art. 4, para 1 and Art. 8 of the Constitution is unsustainable.
It is claimed that Art. 13, para 1 of the WMA, the words „terms and conditions“ determine the conditions and the procedure whereby a bank guarantee is issued and paid as per Art. 81, para 4, item 9. Art. 13, para 1 vests the Council of Ministers with the power to issue ordinances.
The definition is equally valid and covers the bank guarantee that the text challenged provides for. The legislative delegation concerns only the terms of payment of the guarantee. The terms of payment of the guarantee are not based on primary legislation nor are they based on Constitution provisions as required under Art. 3, para 1 of the Statutory Instruments Act (SIA). This is evident as the Commerce Act leaves the definition of the terms of payment to the parties to the contract. Therefore, the terms of payment may be defined by a piece of secondary legislation – Art. 3, para 2 of the SIA. Neither the principle of the state committed to the rule of law nor the principle of the separation of powers has been violated.
3. The provisions of Art. 88, para 2, item 4 and Art. 90, para 6 of the WMA are not unconstitutional either.
The former provision reads that the issued permit shall be terminated upon refusal to amend and/or supplement the permit for recovery schemes and individual discharge of the obligations under Art. 14, para 1 and under Art. 13, para 1 of the WMA; the latter provision allows to reapply for a permit to be issued subject to a WMA procedure.
Art. 90, para 1 of the WMA act reads thus: „The competent authority shall amend and/or supplement the issued permit upon any intervening change: 1. in the regulatory requirements related to the permit; 2. related to the current status under the Commercial Register of the recovery scheme operator or the person discharging its obligations individually; 3. in the program referred to in Art. 53, para 1 of the WMA.“
It is only the law and not the Constitution that arrange administrative regulation (cf. Act Restricting Administrative Regulation and Administrative Control over Economic Activity). The scale of administrative regulation is relatable to the protection that the law shall extend over economic activity as per Art. 19, para 3 of the Constitution.
Given their specific targets the provisions challenged don’t go beyond the confines that are set by the required proportion between administrative regulation and free enterprise. The changes that justify an amendment or a supplement to the permit are recognized by the applicant by the very fact of application to introduce an amendment and/or a supplement. Such steps disallow the permit, as it is, to work effectively. Hence the justification to refuse to issue a permit as per Art. 87, para 2, items 1-4 of the WMA where the application and/or the documents attached thereto pursuant to Art. 81 do not comply with the legal requirements; or where false information or forged documents have been submitted; or the applicant has failed to eliminate the indicated non-conformities or has failed to provide the additional information within the set timeframe; or a bank guarantee meeting the requirements of Art. 82, paras 1 and 2 has not been presented.
According to Art. 93 of the WMA the refusal to amend or supplement the permit shall be subject to an appeal in the procedure that the Administrative Procedure Code provides for. Factually, the grounds on which a permit may be unappealable, as per the MPs’ allegation, are not well-founded. Viewed from the perspective of the constitutionality of the provisions it is essential that they don’t indicate expressly the non-appealability of any administrative act whatsoever and thus don’t preclude judicial control in keeping with Art. 120, para 2 of the Constitution.
4. Interpretation as an intellectual movement from the semiotic (a graphic sign, a combination of graphic signs, words or sentences) to the semantic is a required component in the explication of the meaning of any legal text. Therefore interpretation per se is not a criterion of the clarity of a text. This is the result from interpretation. A legal text is not clear when, despite the combination of linguistic, logical and historical interpretation, its meaning is not precise nor is it unambiguous.
a. Art. 91, para 1, item 1 of the WMA reads thus: „The competent authority shall, with a reasoned decision, withdraw a permit for failure to comply with a prescription issued by the competent authorities with relation to keeping records on waste in accordance with the requirements of this Act or the ordinances referred to in Art. 48, para 1 or Art. 13, para 1 or submission of false data in documents reporting compliance with the obligations and/or the targets referred to in Art. 14, para 1 and/or Art. 15 or in documents used as grounds for issuing the permit.“
The justification to withdraw a permit is deduced from the content of the legal sources that are indicated in the text and that provide for the required accountability and from the truthfulness of the facts as reported in the documents. The provision is neither vague nor unconstitutional.
b. Art. 91, para 1, item 2 of the WMA reads thus: „The competent authority shall, with a reasoned decision, withdraw a permit for failure to comply with one or more of the targets referred to in Art. 14, para 1 for separate collection, re-use, recycling or recovery of the relevant type of ordinary waste.“ Art. 91, para 2, item 3 of the WMA reads thus: “The competent authority shall withdraw, with a reasoned decision, the permit where it is found for the second time that in violation of this Act the targets referred to in Art. 14, para 1 are attained but the population coverage corresponding to the scheme's market share or to the requirements set out in this Act or the ordinances referred to in Art. 13, para 1 is not achieved.” The withdrawal makes the bank guarantee due in full amount – Art. 82, para 3, item 1 of the WMA.
Art. 82, para 3, items 2 and 3 of the WMA read that the payment of the bank guarantee shall be due up to a certain amount in the case of noncompliance with one or more of the targets referred to in Art. 14, para 1 of the WMA or in the case of noncompliance with the obligations for population coverage in the systems for separate collection, re-use, recycling or recovery laid down with the ordinances referred to in Art. 13, para 1.
While the phrase „for the second time“ differentiates the hypotheses in Art. 91, para 2, item 3 and Art. 82, para 3, item 3 of the WMA, the hypotheses in Art. 91, para 1, item 2 and Art. 82, para 3, item 2 of the WMA are entirely identical.
In the former case the guarantee is due up to a certain amount when the violation is not repeated and therefore cannot justify the withdrawal of the permit. There exists no contradiction between the two provisions.
There exists a contradiction in terms between the other two provisions that are interpreted systematically. The withdrawal of a permit is at all times a reason to pay the bank guarantee in full amount – Art. 82, para 3, item 1 of the WMA. The bank guarantee could be paid up to a certain amount only when non-compliance with one or more of the targets referred to in Art. 14, para 1 of the WMA is not a reason for which the permit shall be withdrawn. However, Art. 91, para 1, item 2 of the WMA precludes that. Therefore, the precept that the payment of a bank guarantee due up to a certain amount is left without a field of application.
The non-applicability of a legal precept violates the principle of the state committed to the rule of law when the very precept guarantees justice and the protection of recognized fundamental rights. Art. 82, para 3, item 2 of the WMA about the payment of a bank guarantee due up to a certain amount is not such a precept, therefore, its inapplicability, though undesirable, does not go against Art. 4, para 1 of the Constitution. In any case Art. 91, para 1, item 2 of the WMA is not unconstitutional.
V. 1. The allegation that Art. 33, para 3 and para 4 of the WMA concerning the words „in populated areas referred to in Paragraph 1“ is noncompliant with Art. 4, para 1 and Art. 19, para 2 of the Constitution is unsustainable.
a. The responsibility of the mayor of the municipality under Art. 19, para 3, items 6, 9 and 10 of the WMA pertains to the discharge of a mayor’s ordinary obligation as defined by Paragraph 1 which is to organize the management of household waste that is generated in the area under his jurisdiction. In view of the above reasoning (ІV. 1. „a“) that function is not discordant with the responsibilities under Art. 33, para 4 of the WMA of the users of retail premises, industrial and business buildings and offices in populated areas who are bound to collect waste separately.
b. The systems for separate collection of waste and for separate collection of packaging waste shall include all populated areas with more than 5000 inhabitants and resorts – Art. 33, para 1 of the WMA. Waste from paper and cardboard, glass, plastic and metal generated at retail premises, industrial and business buildings and offices shall be collected separately – Art. 33, para 2 of the WMA.
The challenged exemption under Art. 33, para 3 of the WMA is valid for the separate collection in populated areas where a separate waste collection system in not in place, i.e. in areas that are not covered by Paragraph 1, whereas the challenged Art. 33, para 4 of the WMA makes it binding on the users of retail premises, industrial and business buildings and offices to collect waste separately and to submit such waste to persons holding a permit, an integrated permit or a registration document and/or to a recovery scheme operator.
The differences between the two provisions are to be sought in the size of the populated areas where the activity is carried out and in the number of the population. The differences are equally valid for all users who are occupied in such activities and don’t infringe on the principle of the state committed to the rule of law nor do they trample on the requirement of equal legal conditions for economic activity (Art. 19, para 2 of the Constitution) by licensed economic actors.
The alleged noncompliance with Art. 28, para 2, items 3 and 4 of the WMA concerning the financial sufficiency does not make the provisions unconstitutional.
2. The provisions of Art. 38, para 4, Art. 75, para 2, item 3 and Art. 145, para 1, item 11 of the WMA don’t go against Art. 4, para 1 and Art. 19, para 2 of the Constitution.
The former decrees that payments for transactions with FNFMW shall be carried out using a cashless mode; the latter (the second and the third provision) decree that a permit shall be withdrawn if payments for transactions with FNFMW are carried out in violation of the requirements and constitute an administrative breach that entails an administrative penalty, accordingly.
a. According to Art. 3, para 1 of the Limitation of Cash Payments Act (LCPA) payments in the territory of Bulgaria shall be made only via bank transfers or deposits to payment accounts where their value is equal to or in excess of BGN 15,000 or is below BGN 15,000 where they are part of a financial consideration under a contract the value of which is equal to or in excess of BGN 15,000. According to Art. 3, para 2, Paragraph 1 shall also apply in the cases of payments in foreign currencies where their equivalent in Bulgarian levs is equal to or in excess of BGN 15,000. The equivalent in Bulgarian levs shall be determined on the basis of the exchange rate of the Bulgarian National Bank for the day of payment. These rules are valid for all payments that meet the cited criteria.
Art. 38, para 4 of the WMA is valid only for payments for transactions with FNFMW. The correlation between the hypotheses of the rules is from the general to the particular. The general postulation is that the particular rule, that of the WMA, precludes the LCPA general rules. Therefore regardless of their dispositions there cannot be any contradiction between them just as it would be if the exception was to be found in the LCPA itself.
Essentially, Art. 38, para 4 of the WMA expands the extent of the LCPA restrictions and totally precludes cash payments. Its disposition is relevant in view of the compatibility of the compulsory cashless mode of payment with Art. 19, para 1 of the Constitution that proclaims free enterprise.
The diversity and specifics of the different economic sectors presuppose a need of different legal modalities for their efficient performance. The limitation of cash payments under Art. 38, para 4 of the WMA, like any limitation of rights, shall have to be the minimum that is needed for its goal to be achieved. The goal is to strengthen the WMA integrated control over FNFMW activities, including the payments for transactions with FNFMW. The limitation is commensurate with this goal.
b. The Constitution does not directly provide for the suspension of administrative acts like the permit or the definition of administrative breaches or the determination of the kind of administrative sanctions. They are beyond the reach of constitutional control. However, the amount of the pecuniary sanctions may, in cases where it is in excess of what is needed so as to achieve the legitimate goals of the sanctions, become a disincentive that impacts some economic actors’ performance. For this reason the amount is subject to assessment for compliance with Art. 19, para 2 of the Constitution.
Art. 145, para 2 read in combination with para 1, item 11 of the WMA provides for pecuniary sanctions in the amount of BGN 30,000 to 100,000 in the event of payments for transactions that involve waste in violation of the requirements set out in Art. 38, para 4 of the WMA. These sanctions are intended also for another eight administrative breaches. The low threshold and the broad range of the sanctions make it possible to apply them on a case-by-case basis with consideration, inter alia, of the pecuniary circumstances of the subject of law on whom the sanctions are imposed. Therefore the sanctions don’t violate Art. 19, para 2 of the Constitution.
The texts are not in contravention of the Constitution.
3. Art. 22, paras 1 and 2 of the WMA, the contested passages, make it binding on the municipal councils to adopt an ordinance establishing the terms and procedure for the discarding, collection, including separate collection, transport, reloading, recovery and final disposal of household and construction and demolition waste, including biodegradable waste, hazardous household waste and ordinary waste within the territory under its jurisdiction, including the conditions for registration of sites, as well as the conditions for submission of waste to sites referred to in Art. 19, para 3, item 11 of the said Act.
The provisions don’t treat the kind of the subjects of law who are authorized to carry out the activities that the municipal councils assign to them. The complaint that Art. 19, para 2 of the Constitution is violated since these subjects of law face dissimilar conditions is unjustified.
Art. 22, para 1 of the WMA reads that the ordinance shall be elaborated according to the requirements established by this Act and the statutory instruments of secondary legislation on the application thereof. The statutory instruments of secondary legislation provide the countrywide valid frame to handle activities that the municipal councils are bound to carry out. The matters that the municipal councils are to address in their capacity of bodies of local self-government under Art. 138 of the Constitution fall within their competence.
Given the considerations stated, the texts are not unconstitutional.
4. According to Art. 69, para 2 of the WMA the persons carrying out operations with FNFMW shall enclose with the application referred to in Art. 68 a bank guarantee in the amount of BGN 25,000 and an additional amount of BGN 5000 for each site on which operations are planned to be pursued.
The challenged words “enclose with the application referred to in Art. 68” don’t pertain to the obligation or to the amount of the bank guarantee due; they pertain to the number of bank guarantees due – one guarantee for each RIEW Director who is approached with an application to issue a permit.
The bank guarantee shall be due as follows: 1. in case of permit withdrawal – in full amount; 2. in case of a pecuniary penalty with an effective penalty decree where the penalty was not paid voluntarily – up to the amount due; 3. in case of a duly established violation constituting submission of waste contrary to the requirements under Art. 39, paras 1 and 2 and/or in case of site deletion pursuant to Art. 75, para 3 – up to the amount of the bank guarantee for the relevant site. The purpose of the guarantee is to prevent malpractices in FNFMW submission (dumping) or storage and to ensure payments claimable on misconduct. The number of guarantees due is commensurate with the significant number of malpractices that involve FNFMW and the ensuing therefrom stricter regulation of such activities by the WMA. The regulation is valid for all authorized legal entities and therefore does not violate Art. 19, para 2 of the Constitution. The investment already made is not a matter that the regulation treats and the reasoning to that effect has nothing to do with the compliance of that regulation with the Constitution.
The allegation that the words “to the application under Art. 68” are unconstitutional is untenable.
On the challenge of WMA Art. 82, para 2 which is seen as inconsistent with an international treaty to which Bulgaria is a party.
Art. 82, para 2 of the WMA reads thus: „The bank guarantee shall be unconditional and irrevocable and shall be issued by a commercial bank having its court registration in the Republic of Bulgaria, licensed by the Bulgarian National Bank for guarantee or banking transactions and in possession of specimen signatures of the officials entitled to issue on behalf of the bank guarantees up to a certain amount.“ The challenged words are „court registration in the Republic of Bulgaria” and “the Bulgarian National Bank“.
Within the meaning of Art. 57 (1) of the Treaty on the Functioning of the European Union (TFEU) a bank guarantee is considered a „service“ as it is normally provided for remuneration. Again it is considered a „service“ within the meaning of Art. 57 (2) (b) and Art. 58, § 2 of the TFEU since it is an activity of a commercial character and is to be liberalized as a banking service in step with the liberalization of movement of capital within the EU.
TFEU Art. 56 ff. (Art. 57-61 TFEU) prohibit restrictions on freedom to provide services within the EU in respect of nationals of Member States who are established in a Member State other than that of the person for who the services are intended. Art. 59, § 1 TFEU reads that in order to achieve the liberalization of a specific service, the European Parliament (EP) and the Council, acting in accordance with the ordinary legislative procedure and after consulting the Economic and Social Committee, shall issue directives.
The contested text of Art. 82, para 2 of the WMA makes no differentiation between a commercial bank that is licensed in a EU Member State and bank that is not and imposes restrictions on the banking service – the provision of a bank guarantee that is issued by a commercial bank having its court registration in the Republic of Bulgaria and licensed by the Bulgarian National Bank. On one hand, Art. 5, para 4 of the Constitution proclaims the primacy of any international instrument, which has been duly ratified and promulgated and to which the Republic of Bulgaria is a party, over the domestic legislation providing the domestic legislation stipulates otherwise. Such discord is to be found between the TFEU and Art. 82, para 2 of the WMA inasmuch the text that provides for the restrictions makes no differentiation between the banking service „provision of a bank guarantee“ issued by a commercial bank of a EU Member State and by a commercial bank of a non-EU State despite the liberalization of the service within the Union.
On the other hand, to conform to Art. 59, § 1 TFEU and liberalize services, banking services in particular, the European Parliament and the Council approved directives that have been transposed into the national (domestic) legislation – with respect to the banking services these are Art. 20, para 1 and Art. 22 of the Credit Institutions Act (CIA) that are the applicable law for the case under consideration. Art. 20, para 1 reads that a bank licensed in an EU Member State may carry on through its branch within the territory of the Republic of Bulgaria the activities covered in Art. 2, para 1 and para 2, provided the said activities are included in its license and upon a notice thereof from the competent authority to the BNB. The provision of a bank guarantee falls within the range of activities as described by Art. 2, para 2 item 7 of the CIA, therefore, once a bank is licensed to carry on the said activity, it is free to carry it on through its branch within the territory of the Republic of Bulgaria for which activity the bank does not need to have its court registration in Bulgaria or to have been licensed by the BNB save upon a notice thereof from the competent authority to the BNB. Art. 22 of the CIA, providing the conditions are the same, enables a commercial bank to carry on directly within the territory of the Republic of Bulgaria the activities under Art. 2, paras 1 and 2, free of the restrictions on banking as per Art. 82, para 2 of the WMA, save the requirement that the bank should specify the names and addresses of the persons who will represent it before the BNB. The requirement referred to in the preceding sentence is not an area under discussion in the request for a ruling on the collision of the challenged CIA text with the TFEU.
Considering the stated case that draws on Art. 149, para 1, item 4 of the Constitution, the claim concerning Art. 82, para 2 of the WMA is judged to be unsustainable and therefore to be dismissed. This text should be interpreted conformably upon an assumption that it is applicable only to banking services delivery within the territory of the Republic of Bulgaria, in the event of a bank guarantee that has been issued, subject to the WMA, by a commercial bank holding a license that has been received in a state that is not a member of the European Union. In the light of such a hypothesis the TFEU is totally irrelevant to the conditions in which a commercial bank may carry out banking operations in Bulgaria to accept that the WMA challenged text imposes restrictions that go against the liberalization of banking services that the TFEU Art. 56 ff. provide for. The applicable law in the delivery of a banking service, in this particular case a bank guarantee that is issued by a commercial bank that has been licensed in an EU Member State, shall be Art. 20 and Art. 22 of the CIA, and shall not be Art. 82, para 2 of the WMA, hence the text challenged is not subject to review for compliance with the TFEU.