site.btaWashington Sees Bulgaria as High-Risk Country for Investment, US Lawyer Says

Bulgaria is seen as a high-risk country for investment because of its relations with Russian oligarchs and China. Also, the lack of transparency here could lead an American investor to commit an unintentional violation, said Kevin Carroll, a partner in the Hughes Hubbard & Reed law firm. He was one of the keynote speakers at an international conference on "Cross border investments in a changing world: sanctions, screening and dispute resolutions" taking place at the Grand Hotel Sofia Tuesday. The conference is part of the programme of the Court of Arbitration at the Bulgarian Chamber of Commerce and Industry (BCCI) for expanding the use of alternative dispute resolution, BCCI said. 

The US government is also very concerned about corruption in Bulgaria, according to Kevin Carroll. He pointed to other concerns Washington has with Bulgaria, such as the high level of the shadow economy, which is believed to be equal to one-third of the size of the national economy. There are also concerns about real estate transactions being used for money laundering, the lawyer said. 

He also stressed the discrepancy between the statistics that assign Bulgaria the place of the poorest EU country and the expensive cars that are seen on the country's roads. 

One consolation for investors is that Bulgaria has signed an arbitration agreement with the US, said Carroll.  

In his presentation he also spoke of the importance of sanctions, measures against money laundering, investment monitoring and maintaining the rules of international order established after the end of World War II. 

In the context of what he described as long-term competition with China and, to a lesser extent, Russia, Kevin Carroll said that sanctions, export controls and the fight against corruption are seen as the only tools the US can use against its adversaries. 

He argued that both Republicans and Democrats prefer financial tools to military involvement. That's why he expects to see more such financial tools being used, keeping up a trend that emerged after the Russian invasion of Ukraine in February 2022. Among the measures being implemented are the formation of teams of investigators with military participation in them. These units will investigate the path of the chips that were used in projectiles that hit targets, harming US interests. The findings of the investigations will have a direct impact on export control measures. 

As for China, Kevin Carroll said that Washington is considering sanctions in the event of a Chinese invasion of Taiwan which is expected in the next three years. The process that has started includes reconsidering the supply chains.