TSAMTO, November 25. The Bulgarian parliament has approved a bill on the ratification of two agreements related to the supply of eight F-16 Block fighters to the country's Air Force.70 and related equipment.
As reported by Novinite.bg, With 159 votes in favor, 45 against, with three abstentions, the National Assembly voted in two readings in favor of the bill on ratification of the "Agreement on Accounts between the Bulgarian Ministry of Defense and the Federal Reserve Bank of New York" and "Agreement on Certain Accounts Related to the Financing by the Bulgarian Government of Foreign Military sales between the Bulgarian Ministry of Defense, the US Defense Security Cooperation Agency (DSCA) and the Federal Reserve Bank of New York."
The agreements relate to the fulfillment of contracts for the supply of 8 F-16 Block aircraft.70. According to the agreements, the funds for the purchase must be deposited in the account of the Federal Government trust fund for all Bulgarian contracts for the purchase of weapons under the Foreign Military Sales Program (FMS).
The terms of the FMS program allow you to place and invest part of the funds paid by Bulgaria through bank and investment accounts with the Federal Reserve Bank of New York in order to ensure the profitability of these funds in favor of the Bulgarian state. The amount of funds that can be transferred in this way will be determined by DSCA, and the funds must be kept in the account of the trust fund (intended for the Republic of Bulgaria) to cover current DSCA payments on the project for the next 90 days. Since it is possible to carry out investment operations, according to the information provided, funds are usually placed on overnight deposits and low-risk short-term bills of the Federal Treasury with different maturities.
The Bulgarian Ministry of Defense will be able to monitor the accounts on a daily basis and, if it is determined that further investment of these funds is impractical, it can send them back to the Trust Fund account. Given that the Ministry of Defense does not have the necessary experience of such actions, the Bulgarian National Bank (BNB) will provide consulting assistance to it.
The "Law on the State Budget of the Republic of Bulgaria for 2022" provides that funds transferred in 2019 by the Ministry of Defense to the US Government account for new combat aircraft can be deposited and invested through accounts with the Federal Reserve Bank of New York in favor of the Ministry of Defense on the basis of a decision of the Council of Ministers.
As reported by TSAMTO, in 2019 Bulgaria transferred $ 1.2 billion. To the Agency for Security Cooperation of the US Department of Defense (DSCA) as a prepayment for 8 ordered F-16 fighter units.70, related equipment and weapons. It was assumed that the first aircraft would be delivered in mid-2023, and the full delivery would be completed by 2024. However, due to the impact of the COVID pandemic, the schedule was disrupted. It is now expected that deliveries will begin in 2025, and initial readiness for combat use will be achieved in 2026.
The ratification of the agreements will allow Bulgaria to receive some income from funds that have been stored in the United States since 2019. The agreement was supported by all political forces in Bulgaria, except the Bulgarian Socialist Party (BSP) and the Vazrazhdane party.
