2024-03-22 07:31:22
Now any bench watching such processes, must decide how to continue – to terminate or justify
A case for a BGN 1,030 loan, but with 50% interest per month, given by a former mayor to two poor women, became one of the reasons for the Criminal Board of the Supreme Court to overturn the judicial practice and announce that usury is no longer a crime when given personal money. The decision of the Supreme Magistrates in Interpretation Case No. 1 of 2020 was announced last Friday, although it was instituted more than 3 years ago.
That is
mandatory
for all judges,
who, according to what stage the case is with them, must consider how to apply it. They can terminate or justify.
The beginning posed a question to the Supreme Bar Council. He asked if the provision by occupation of loans/credits with funds that have not been raised through public solicitation of deposits or other recoverable funds constitutes banking activity. And does its implementation without permission constitute a crime under Art. 252, para. 1 of NC?
And the Supreme Court replied that when the funds are not raised through public solicitation, it is not banking activity. Even “by occupation”, that is, if it has become a job. Therefore, it does not need a permit and there is no way to be prosecuted by the NC, because the text in question applies only if banking and insurance activities are carried out without a permit.
The problem is, in fact, that simple usury has so far been prosecuted under this text, which refers to banking without authorization. And there is no other text in the NC.
He says that who, without a corresponding permit, carries out banking, insurance or other financial transactions, provides payment services or issues electronic money, for which such a permit is required, shall be punished by imprisonment for three to five years and confiscation of up to one-half of the property of the actor.
The other two paragraphs of this text, which refer to the first, provide for higher penalties. Banker Stoyan Alexandrov was investigated for one of them. (For him see below.) The Supreme Court’s decision also applies to them.
The text is in the NC from 1995, when the so-called pyramids were created, and the people who headed them were called pharaohs. Since 2007, however, the Law on Credit Institutions has been in force, which regulates this activity.
Before the Supreme Court announced its decision, a three-judge panel hearing a usury case issued a preliminary inquiry. This is a question to unify the jurisprudence in the EU.
The case for which they asked the court in Luxembourg is about a loan of a total value of BGN 1,030 given to two women. The action took place in 2016 and 2017 in Knezha, and the money was provided by a former municipal councilor. He gave seven loans, the amounts ranging from BGN 30 to BGN 200, but the interest was exorbitant. The thirty BGN, for example, was given at 100%.
It is clear from the decision of the Pleven Court, and then the Veliko Tarnovo Court, which sentenced him to 3 years of probation, that the women were in a difficult situation.
In November 2016, one had money problems and
need of
funds,
because her child
it will be
She knew from her cousin that the former municipal councilor lent money at interest, although he was not the only one in the region who did so.
The two met and she took BGN 100 from him, agreeing to pay him BGN 50 in interest per month. The woman undertook to return them in a month and gave him her debit card and PIN as a guarantee. On November 16, 2016, he himself withdrew the due principal and interest in the amount of BGN 150. Two more loans followed.
The second woman also needed money in April 2016. She called him on the phone. They met in a parking lot in front of the municipality in Knezha.
He gave her BGN 200, and they agreed that she would pay him BGN 80 in interest per month, representing 40% of the principal owed. As a guarantee that she would return the money to him, she gave her debit card from May to December 2016. The woman paid BGN 80 in interest per month, paying a total of BGN 640. Two more loans followed. The former adviser was
sentenced to
3 years probation
from both courts, but when the case reached the Supreme Court, the magistrates referred the question to the EU court.
In it, they request an interpretation of Regulation No. 575/2013, in which the definitions of credit institution and license are given. And to establish whether, according to EU law, credit institutions carry out lending only with public funds and cannot also carry out lending with funds received from other sources – interest, fees, etc.
The EU court’s response came in November of this year. and to a large extent predetermined the decision of the Supreme Court. The European judges said that the scope of the term “credit institution” includes enterprises whose subject of activity includes the public solicitation of deposits or other recoverable funds and the granting of loans for their own account.
After the decision of the EU court, it was clear what the Supreme Court’s decision would be.
In it, the supreme judges point out that the blanket nature of the text in the Criminal Code refers to non-criminal normative acts for defining the concepts – “banking”, “insurance”, “financial transactions”, “payment services” and “electronic money”, as well as regarding the authorization regime for their implementation.
The judges then analyze the concept of “bank”. They point out that it is characterized by the performance of typical activities.
The first is the public solicitation of deposits or other recoverable funds. The second is the provision of loans or other financing at one’s own expense and at one’s own risk.
The judges concluded that a bank would not be a bank without the public solicitation of deposits or other recoverable funds. Therefore, the court said, the granting of loans at interest with funds not raised through public solicitation of deposits cannot be qualified as banking activity. And if it is not a banking activity, no permission is needed, and if no permission is needed, its absence is not a crime and could not be subject to the NK.
The interpretive decision was signed with a dissenting opinion by judge Mina Topuzova.
She points out that this understanding is at odds with case law since July 1, 2007, since the Credit Institutions Act.
“In a number of its decisions, the Supreme Court has accepted that the provision of loans by individuals against the receipt of unregulated income is a crime, regardless of whether it concerns banking transactions for which a license is required or financial transactions that are subject to registration,” he says. she.
Stoyan Alexandrov – the most famous defendant under this text of the law
During his lifetime, the late financier Stoyan Alexandrov became the most famous usurer in our country. According to the prosecutor’s office investigating him, from 2002 to 2015, he distributed 3,738,600 euros, 1,693,160 dollars and 541,000 leva to 61 people. The money was given against a home mortgage, 18% interest or hidden interest, for example, with a loan of BGN 50,000 in 6 months, another BGN 4,060 is returned. The case against him was closed in 2020 due to his death. Recently, the former finance minister was talked about again after his son Petar was arrested on charges that he participated in the murder of one of his father’s debtors – Kiril Rusev.
Alexandrov himself explained that he did not hide the fact that he gave loans, but as an individual, and only personal funds with taxes paid. It was a usurer who supported himself by it. And then the law did not prohibit the provision of personal money. It was forbidden to carry out an “occupational activity”, that is, to turn it into a job. Just now the Supreme Court said that even if it is for business, if the money is personal, it is not a crime.