russian state properties worth €14 million changed owners in Sofia

While European countries are freezing russian state assets, in Bulgaria two of the Kremlin’s most desirable properties in the capital have changed hands. The buildings were sold for more than €14 million to Valentin Zlatev – the longtime former head of Lukoil Bulgaria – as a private individual. The seller was the russian state enterprise “Goszagransobstvennost”, which manages russian properties abroad.

Payments have reportedly been deferred until any potential lifting of sanctions, and the deals were officially notarized and entered into the property register on 29 May. The current EU sanctions regime prohibits transactions with russian state entities, turning this case into a potential test of how strictly European restrictions are enforced in Bulgaria.

Valentin Zlatev, who managed Lukoil’s Bulgarian operations for 20 years and now runs a hotel business, stated in an official position: “The deals were carried out in strict compliance with Bulgarian and European legislation, taking into account and following the requirements of EU regulations and regimes, as well as their amendments and supplements.”

The case has surfaced at a time when Bulgaria is already under pressure from the European Commission over sanctions implementation. According to the official EUR-Lex register, Bulgaria has not notified any national measures under Directive 2024/1226, which requires member states to criminalize violations and circumvention of EU sanctions, including those imposed on russia after the invasion of Ukraine.

In March, Brussels sent a reasoned opinion to Sofia for failing to inform the Commission about the transposition of this directive into national law. Along with Belgium and Slovenia, Bulgaria is one of only three member states to have reached this stage of the infringement procedure. If Sofia does not act within two months, the European Commission may refer the case to the Court of Justice of the EU and request financial penalties.

The story of the russian properties also comes against a backdrop of decisions that have placed Bulgaria outside the mainstream European position on russia. Sofia was among the few EU countries that did not join international efforts to create a special tribunal for russian aggression against Ukraine – a stance criticized by the opposition but publicly defended by President Rumen Radev, who is now Prime Minister.

Radev has been one of the most consistent critics of sanctions against russia in Bulgarian politics. During his two presidential terms, he repeatedly argued that the restrictions harm European economies more than the Kremlin. Recently, Foreign Minister Velislava Petrova stated that the future of the sanctions regime should be coordinated with the United States.

The timing of the transactions has also raised eyebrows. The deals were registered in the property registry one week after the executive director of the Registry Agency, Daniela Miteva – who had led it for five years – was replaced. On 22 May, Eliana Ilieva was appointed in her place on the proposal of the Justice Minister in Rumen Radev’s government.

Ivaylo Mirchev, co-chair of “Yes, Bulgaria” (part of the opposition Democratic Bulgaria coalition), suggested the timing was not coincidental.

Both deals were notarized by Notary Zornitsa Todorova, wife of Anton Slavchev – the recently dismissed head of the now-defunct anti-corruption commission. Both Slavchev and the commission had long been criticized by the opposition and civil society for political dependence and selective enforcement of the law.

Following media reports about the sale of the russian properties, the Ministry of Justice announced that Justice Minister Nikolay Naydenov had ordered an “immediate inspection of all facts and circumstances” surrounding the case involving businessman Valentin Zlatev.

EUalive’s partner BIRD.bg, an investigative website, revealed that Zlatev purchased the four-storey building at 20 Shipka Street for €8.59 million. A second property at 11 Raiko Aleksiev Street – a five-storey block in a diplomatic quarter – was reportedly sold for €5.6 million.

The Shipka Street property (total area 3,371 sq.m, two-thirds of which is a large yard) is located in one of Sofia’s most expensive districts, opposite Doctors’ Garden, where square-meter prices now exceed €10,000. At market rates, the property would be worth at least four times the agreed sale price.

The buildings were donated by Bulgaria to the USSR in 1957. For decades, they housed russian diplomats and engineers working in Bulgaria along with their families. In recent years, the buildings have stood empty.

So far, only the opposition “Democratic Bulgaria” has reacted. The party filed a signal with the Prosecutor’s Office and the State Agency for National Security (DANS) over possible circumvention of sanctions against russia and risks of money laundering related to the properties acquired by Zlatev.

No other parliamentary party has requested an investigation. The silence is particularly notable from GERB, whose leader Boyko Borissov has long maintained close personal relations with Valentin Zlatev. Borisov once publicly explained their friendship by saying they play cards together and jokingly noted that “Zlatev cheats at cards.”

Whether the deals made by the former Lukoil executive are compatible with the European sanctions regime now rests with Bulgarian institutions. But the stakes go far beyond two central Sofia properties. If such a transfer of russian state assets proves permissible, it will raise serious questions about whether EU sanctions against Moscow are applied equally across the Union – and whether Brussels has effective mechanisms to ensure compliance.

Source: EUalive.net