Directive 2026/1021 (“the Directive”) was adopted at the European Union level, introducing a new framework to combat corruption within the Community. The Directive is already in force but must be transposed by Member States, including Bulgaria. It aims to establish minimum harmonized rules regarding the definition, investigation and punishment of corruption offenses, covering both the public and the private sectors. Of particular significance is the emphasis on the liability of legal entities, including private commercial companies, when a corruption offense is committed for their benefit or has been made possible by a lack of effective supervision or control.

The Directive broadens the understanding of corruption offenses beyond the classic cases of giving and receiving bribes. Its scope covers bribery in the public and private sectors, embezzlement, trading in influence, the unlawful exercise of public functions, obstruction of justice, as well as certain forms of concealment and illicit enrichment related to corruption offenses. In addition to penalties for individuals, the Directive provides for significant sanctions against legal entities (see below).

The Directive must be transposed in Bulgaria by June 1, 2028, and even before that, companies should assess the extent to which their internal rules, compliance programs, control mechanisms, and reporting procedures are sufficient to limit the risk of liability for the legal entity and the imposition of significant sanctions.

Essentially, each Member State must ensure that legal entities can be held liable for corruption offenses when such offenses are committed for their benefit by a person holding a leading position within the legal entity, acting either individually or as a member of a body of that legal entity. These are persons who have the authority to represent the legal entity, to make decisions on its behalf or to exercise control within the legal entity. National legislation is required to adopt the necessary measures to ensure that legal entities can be held liable when a lack of supervision or control on their part has made it possible for a crime to be committed for the benefit of the legal entity.

Sanctions against legal entities include criminal and non-criminal sanctions that are proportionate to the gravity of the offense, as well as to the individual, financial and other circumstances of the legal entity in question. They may also include various criminal or non-criminal measures proportionate to the gravity of the offense, such as:

· exclusion from state aid or subsidies;

· exclusion from access to public funding, including public procurement procedures, the awarding of grants, the granting of concessions and the issuance of licenses;

· temporary or permanent exclusion from the right to conduct business activities;

· revocation of permits and licenses to carry out the activities that led to the relevant offense or made it possible;

· the ability of public authorities to cancel or terminate a contract in the context of which the offense was committed;

· placement under judicial supervision;

· judicial liquidation;

· closure of businesses used to commit the offense.

Minimum requirements for the maximum amount of fines are established, which shall not be less than:

· In cases of bribery in the public or private sector, as well as embezzlement: 5% of the legal entity’s total worldwide turnover for the fiscal year preceding the year in which the offense was committed or for the fiscal year preceding the year in which the decision to impose a fine was rendered, or an amount equivalent to EUR 40,000,000;

· In cases of trading on inside information, abuse of public office and obstruction of justice: 3% of the legal entity’s total worldwide turnover for the financial year preceding the year in which the offense was committed or for the financial year preceding the year in which the decision to impose a fine was issued or an amount equivalent to EUR 24,000,000.

· Member States may establish rules for cases in which it is not possible to determine the amount of the fine based on the criteria described above.

There may also be mitigating circumstances applicable to legal entities. The first case is where the legal entity has implemented effective internal control, ethics, and compliance programs to prevent corruption before or after the commission of the offense. A second possibility is when, following the discovery of the offense, the legal entity promptly and voluntarily reported the matter to the competent authorities and took corrective measures.

At the same time, of course, the Directive also provides for the corresponding criminal liability of natural persons who have committed or participated in the relevant offense.

The Directive represents an important step toward establishing a unified and more effective European framework for combating corruption. By introducing clear rules on the liability of legal entities, significant sanctions and incentives for implementing internal control and compliance mechanisms, the Directive aims not only to punish corrupt practices but also to prevent them.

Of course, our team is monitoring the upcoming transposition of the Directive into Bulgarian law, which will impose new requirements on organizations and reinforce the importance of effective corporate responsibility programs. The criminal law framework regarding specific offenses will inevitably be subject to amendment as well.

This article has been prepared for and is part of the Legal Digest issued by Penkov, Markov & Partners. The publications therein do not constitute legal advice and are not binding. Penkov, Markov & Partners reserves all rights to this material, and any distribution thereof is subject to the prior written consent of the law firm.