Bulgarian Scrap Dealers Threaten to Move to Grey Economy

A total of 300 companies dealing in ferrous and non-ferrous metals may be edged out of the market after the introduction of bank guarantees and new requirements in the Waste Management Act, according to Borislav Malinov, Chair of the Bulgarian Association of Recycling (BAR).

Scrap dealers are to file applications for new permits by January 14, 2013.

Each of the companies specialized in the utilization of different types of waste is to provide a bank guarantee for a different sum.

The bank guarantee for companies specialized in the utilization of packaging waste, electronics, and automobiles amounts to BGN 1 M, for motor oils it stands at BGN 500 000, for car batteries and tires at BGN 100 000, and for metal scrap at BGN 25 000, according to Malinov as cited by the Bulgarian Telegraph Agency (BTA).

In a Tuesday interview, the Chair of BAR argued that the number of companies on the scrap market would drop from the current 8000 to around 500 because small companies would not be able to pay the mandatory bank guarantee.

He added that a large number of small companies would move to the grey sector of the economy as a result.

Malinov claimed that the number of officially registered scrap sites in Bulgaria was 1150 but a total of 1600 scrap metal yards were actually functioning, the remainder being unregistered traders.

The Chair of BAR insisted that the new legal requirements would leave no more than 800 scrap yards

He said that the absolute minimum of scrap yards buying scrap metal, motor oils, car batteries, electronics, kinescopes, lamps, etc in Bulgaria was 1000.

Malinov suggested that the gap between the minimum threshold and the number of scrap yards that would actually stay in operation would be filled with new investments by the companies which remained on the market or some regions of the country would simply be left without scrap yards.

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