Dear Ladies and Gentlemen, Mr. Mayor, Your Excellencies,
First of all I would like to thank for the opportunity to participate in the International Conference Economy of Crime: Grey Sector, Trafficking, Corruption.

The initiative of the organizers from the Center for the Study of Democracy to invite the US Ambassador to Bulgaria, H.E. James Pardew, as well as the UK Ambassador H.E. Ian Soutar, and representatives of governmental, political and international institutions, experts and intellectuals, and provide a platform to their understandings and ideas is to be welcomed. Curbing crime in the country is one of the major priorities in the program of the Bulgarian government and also a task of primary importance to the Ministry of Interior. It is closely related to the implementation of the National Strategy for Accession to the European Union and NATO.

In our work we pay special attention to neutralizing organized criminal groups, whose actions create potential risks to the economic security of the country. Our major objectives are: limiting criminal influence on the financial and economic spheres, facilitating an improved investment climate in the country and reducing the damages inflicted on the state budget. In view of fulfilling its objectives, the efforts of the specialized services of the Ministry of Interior are focused on limiting corruption in the authorities responsible for licensing regimes, the privatization process, and law enforcement institutions dealing with economic and organized crime.

I daresay, as a result of the measures taken so far the intensity of the actions of the organized criminal groups is considerably limited. The perimeter of the grey economy, controlled by the structures of the organized crime, has been narrowed. The organized channels and criminal mechanisms used for trafficking and illegal transactions of excise goods, pirate CDs, household appliances, etc.

At the same time our specialized services detect new trends in the work of the organized criminal groups, which bring forth some additional challenges.

Firstly, organized criminal groups are becoming more active in the financial sphere. The schemes for money laundering, capital flight and return to be then invested in the process of privatization have been refined. Forging false documents and their illegal usage for financial and bank fraud has increased.

Secondly, the processes of restructuring of the organized criminal groups and their direction to spheres providing easy and quick return on investments have intensified. The conflicts between them, which have arisen on this basis, are mainly connected with the distribution and re-distribution of the market spheres and territories, which often results in criminal offences.
Thirdly, the number of the cases of illegal 'crediting' has increased. Organized criminal groups are using the weaknesses of the banking system to direct financial resources to money-lending, which in most cases ends up with racketeering, blackmailing and confiscation of borrowers' assets.

Our major conclusions are that the illegal trafficking in goods creates unfair competition and finances the grey economy in the country. Through the illegal import of goods Bulgarian and foreign importing companies are establishing a system of relationships with distributors and retailers. They are using the weak points in the customs, financial and criminal justice systems quite effectively. By corrupting state officials they are trying to pervade the tax and customs services in order to secure the contraband channels.

Companies from the duty-free zones of the European countries are also involved in the criminal schemes for trafficking of goods. Attempts are made to use forged Euro-certificates for non-European goods and offshore companies and stores for distribution to countries, where the origin and price of the goods are difficult to detect.

During the current year, the structures of the grey economy and organized criminal groups continued to exercise corruption pressure on the customs, border police and tax officials, as well as on the state and local administration bodies. Numerous acts of corruption related to privatization and liquidation of companies and enterprises have been detected. These were linked to attempts at getting a reduced evaluation of assets, licenses, causing deliberate bankruptcies and various offences during public procurement procedures. I would like to pay special attention to the Ministry of Interior's actions for cutting off trafficking. A few attempts for diverting considerable amount of spirits through false re-export have been averted. Attempts for fictitious export and contraband import of fuels by sea or land have been cut short. New criminal mechanisms for trafficking of legally produced cigarettes in the west European countries, for criminal export of fuel by sea and import of nutrition goods and household appliances have been detected.

Last but not least, the problem of corruption is a challenge to the politicians, as well as to every state administration and the law enforcement institutions. Our intentions and actions are clear and their results are obvious. They are evident in the programs and the strategic documents of the government. They provide for a good opportunity for a systematic work in this area. Our goal is to aid the government as much as we can in its efforts to enhance the trust in the state institutions and thus improve the investment climate in the country and attract foreign investments.

Ladies and Gentlemen, I would like to express my conviction that in the course of the discussion that will follow new ideas for improving the legal regulation of the problems of money laundering, tax and financial crime will be presented. I am also convinced that they will give additional opportunities for raising the effectiveness of the work of all state institutions in countering crime in the economic and financial sphere.

I use the occasion to express my appreciation to the organizers and initiators of this international conference and to assure you that the Ministry of Interior will continue to work actively and in close cooperation with the civil society and the international institutions for further promoting the effectiveness of efforts towards countering crime and for covering the criteria of the European Union and NATO.

I wish you all successful and fruitful work.
Thank you.