26.09.2014

Dear colleagues,

Due to inquiries made in connection with the press release disseminated today by the European Commission on the proceedings opened against Bulgaria in relation to the access of depositors to their funds in Corporate Commercial Bank AD and Commercial Bank Victoria EAD, we would like to inform you as follows:

The opened proceedings are not a "sanctions procedure" but part of the pre-litigation phase of the proceedings for failure to fulfill the obligations arising from the membership of the Republic of Bulgaria to the EU, which applies to all Member States pursuant to Article 258 of the Treaty on the Functioning of the EU.

The purpose and the task of such procedure is not to "punish" the respective Member State but to determine, in dialogue between the European Commission and the authorities of the Member State, whether and what is the infringement of the EU law, what measures should be taken and in what time periods . The same issue had already been subject to discussions and exchanged correspondence with the European Commission in the framework of the so called information phase (preceding the pre-litigation phase). In its response to the European Commission the Bulgarian side expressed its readiness to take the necessary actions to make legislative changes should any discrepancies with the EU law be established.

The letter, which was sent today to the Bulgarian authorities and which should be answered not later than 15 October 2014, is a Letter of Formal Notice, which is the first stage of the pre-litigation phase. The Bulgarian authorities will prepare a single, coordinated and consistent response to all questions raised in the letter of the European Commission and, as before, the actions of the Ministry of Finance, the Bulgarian National Bank and the Deposit Insurance Fund will be synchronized.

Only if the European Commission is not satisfied with the answer of the Bulgarian authorities to the Letter of Formal Notice or believes that the infringement is not eliminated it will send a second letter called Reasoned Opinion, in which it will present its arguments on the answer of Bulgaria. The Reasoned Opinion is also part of the pre-litigation phase and will again include a timeline in which the Bulgarian authorities should answer. Only then, if the European Commission considers that the Bulgarian side has not complied with its Reasoned Opinion within the prescribed period, it may decide to refer to the European Court of Justice, thus launching the litigation phase of the proceedings.

We would like once again to assure the depositors and the investors in the two banks, as well as the entire Bulgarian society, that the Ministry of Finance is making all possible efforts to find a solution to this complicated case.