Bulgaria is country where the Copyright is respected… not! or how Samsung bully their customers with the help of Bulgarian customs

Many people looking from aside think that running business it trivial. They probably think – what so difficult once you have the money you buy components for X manufacture something and sell it for Y and make profit (Y-X), so simple anyone with money can do it! The reality is different, every day you have to fight and solve small and big challenges.

For 25+ years I had so many issues I could write a book, some are funny, some are scary, many may seems even unreal and impossible. Specially at the beginning when the communist system collapsed and Bulgaria took the path to the democracy it was challenging to run business and take all risks, many times we were on the edge to go broke (our first big customer send us $10 000 electronic components for his order which were stolen at Sofia airport – we had no money to cover these components cost except to sell my parents home 🙂 ) but I may write these stories one day I’m telling you it will be big book 🙂

For these 25+ years I though almost nothing can surprise me – but Bulgarian Customs and Samsung did it last week!

We use lot of electronic components from different vendors. Integrated circuits, resistors, capacitors, we have over 6000 different types of components we use for our boards in stock. For OLinuXino we use DDR3 memories from Samsung, Hynix, Micron etc.

We never ever had problem to import these components, everything was working flawless… until now.

We source the memories from many different suppliers. We made order and the memories were shipped and February 11 we got message from the carrier that the parcel is in Sofia and we have to arrange the customs clearance.
We paid all taxes and duties in advance and start waiting the ICs to be released and delivered then we got this odd message from the customs broker:

The customs require from you document, which authorize you to import goods with Samsung brand. Please provide such document to release your goods.
Also these goods need to be check if they are original and produced by Samsung or they if found fake would be destroyed for our account?!?

This is the first time we ever heard that we need such document, we import integrated circuits form many different brands and I’m pretty sure there is no permission necessary to import ICs.

I check again EU TARIC web site and for the Tariff code 85423290 which classifies the ICs there is no requirement to have any such permission document!

I asked the customs to issue me in written what law requires such permission, so I can have things in written and can contact lawer to consult me, but without any reply, they do not issue such written document but neither release our goods.

The carrier told me that Samsung as trademark holder found some way officially to bribe the Bulgarian customs and now when the customs officer see carton with Samsung on it stops the parcel and require such “permission” document.

As I wanted to handle this ASAP (every day we lose means we can’t produce our boards without these memory chips) I contacted Samsung Bulgaria technical support as trademark holder and explained them the situation. The people from the call center were very kind … and ignorant – they were trained to help people who can’t use their phones and TVs, but quickly gave me phone to the B2B manager of Samsung Bulgaria who could eventually help me. I called him several times, but the phone was not answering after few hours trying the phone was pickup by his assistant who told me that this mister is on trip but after she hear what the problem is told me that even if he was here he couldn’t help me, but will forward my message to the one who deal with trademark and customs.

To be honest people at Samsung were nice and really wanted to help, but just didn’t know how 🙂 One hour later I got call back by the manager who inspects the goods at custom to see if they are original and if they come from authorized distributor or not. I explained him the situation and as I guess he was doing these checks only on white and home appliances, not for components. He said such document “permission” could be issued by Samsung legal department which is in … Romania 🙂 Several days passed meantime without any sign that the problem will be solved soon.

We had no other option but to wait and finally yesterday we got call from the carrier that customs officer and Samsung representative want to open the parcels and to check the content. I told them that these are moisture sensitive devices and gave them instructions how to open and how to handle. Interesting fact is that they wanted to have my permission and instructions in written (aha!). One of the problems is that if the memories are on trays and these trays are not closed tight after the “inspection” they may slip during the transport and the balls of the memory chips to get smashed which make them useless for production.
The check obviously went good as today we receive the parcels.

Here is the carton with the samsung on outside which alerted the watchful customs officers:

 

here is how the one parcel with ICs looked after the “inspection”:

Our parcels were held 8 days on the customs, without anyone to give us written official statement why it’s held and based on which law they require these documents, so we could later defend our interest for lost profits damage in court. The parcels value with the taxes paid was exceeding  $60K and inside there were also Flash memories from Hynix and industrial DDR3 memories from Micron, the Samsung memories were just one position out of three.

Integrated circuits are raw components used in production.

It’s non sense Samsung to sell these and later to not allow you to import them and use them.

The Bulgarian customs have no capacity and competence to see if one chip is original or not by just looking at it and it’s packing, without special technical knowledge and trained personal and equipment, then why is this whole procedure necessary?

We lost 8 days for some non sense procedure. What we can do from now on?

At least we can try to avoid Samsung integrated circuits if possible and to use Micron and Hynix instead, the prices are same on the stock exchange, just other companies do not bully their customers.

I start to think was it good idea to bet on Samsung SMT placement machines too? What will happen if the machines arrive and Bulgarian customs arrest them to check if they are not fake or original Samsung machines – this is totally crazy as they cost a lot of $$$ to take such risk. Or what happens if your machine breaks and stop your production and you need spare parts which are held on the customs to check if they are “original” and you can’t use your assembly machines for weeks waiting someone from Samsung to go to the customs and bless the parts release from the customs?  After this accident now I look at anything with brand Samsung as trouble which we have to stay away from.

It wouldn’t be so ridiculous if in Bulgaria one was really carrying about copyright, but everybody knows that here copyright still means nothing, people download movies from local Bulgarian torrent servers which every kid knows and no one can stop these torrent servers as they obviously profit enough from advertisement to pay to whom it needs for protection. Internet providers do not cut the access to these servers as otherwise they would have no customers – the competition among internet providers here is huge and no one will take the risk to stop the access to these servers. These servers do IP filtering so no one outside Bulgaria can access them, but if you have local IP you can download any movie or software without single issue and at top download speed.

 

TL-DR; Samsung pays to Bulgarian customs to stop goods with their brand and then you are at their mercy. We will try to avoid importing/using Samsung products in future.

Olimex wins EU funding for production expansion with two new assembly lines

Bulgaria is part of EU and this gives to companies here chance to apply for EU funding.

There are many programs for innovations, expanding the capacity, energy efficiency etc.

This gives amazing opportunities to Bulgarian companies to become globally competitive.

Unfortunately the most interesting area the innovation is burden with most paperwork and some things which are totally unacceptable with our Open Source way of thinking. For instance one of the requirement is to fill file patents for the innovation, which to protect the EU investment in your company.  Looks logically, but this effectively cut off all companies which work with Open Source Technologies.

So for us the program for expanding production capacity option was interesting, as there the requirement is just to show good past records for company financial state and to prove that you will increase your production after you got this funding. Anyone can apply in this, but there are very strict requirements and open and transparent ranking rules, so if you run your business in the shadows you got no chance to apply and win such funding.

In the past we have read terrible stories in the newspapers about corruption practices with these EU funding, so we never considered to participate in such project.

The things changed with the time though and EU commission and Bulgarian government developed capacity and competence to find a way to make this in order and to tightly control the process so such practices to be stopped.

In the middle of 2015 year we got contacted by consulting company, which offered us free evaluations of our chances to win funding, they took our info from the public company register. It was free offer, so we had nothing to lose, and agreed. We got free pre-evaluation and they estimated our chances (number of points we could get in the process) to win funding as very good, so we decided to apply for funding. Even if nothing happen we do not lose anything except small fee for the consulting services, so it was worth to try.

I know many people who apply and prepare the documents by themself, but we decided to use the consultant as otherwise someone had to read all paperwork associated, and this would probably cost same as if we pay to professional to do it properly.

To our nice surprise in December we got letter from the Ministry of Economics, that we are approved and when we check the number of points we got in the rank list was exactly same as our consultant pre-estimated. Good work! This means there are really clear and transparent rules to evaluate your company chances to win. Also the complete communication with the government and paperwork submissions etc was held via well done and easy to use Internet portal.

In January we were invited at 10.00 o’clock in Sofia in the Ministry of Economics on brief meeting to hand us the contract to sign in personally and there was another nice surprise: exactly in 10.00 we made the meeting and finished everything for 10 minutes – quick and professional. I have no had touch with the Bulgarian administration for very long time and obviously the things got improved a lot at least in the Ministry of Economics!

So we are now lucky winner of EU funding for two new high speed, high precision assembly lines with screen printers and reflow ovens!

This will increase the number of assembly lines in our company to total six! Last year many customers have asked us for assembling custom PCBs and we had to decline their requests as we got our own over 600 different products and our assembly lines are loaded at 100%, when we got these two new lines we will have ability to take such external orders.

The whole procedure is not very quick as there are lot of control and requirements to be met when government and EU spent their money, but in about one year from now we expect to have finished the complete procedure and to have our two new assembly lines up and running!

Bulgaria is the most attractive IT outsourcing destination in Europe!

The original article can be read here.

Bulgaria has one of the lowest government debt as % of the GDP in EU:

and when you add to this the skilled labor and the low taxes (10% flat company profit tax and 10% personal income tax) you can guess why Bulgaria becomes popular destination for outsourcing IT services 🙂

Bulgaria has the highest average reputation among top users in the Stack Overflow

VB News posted interesting article. They analyzed data from StackOverflow where coders exchange Questions and Answers. Users of the platform vote up or down answers to questions this way ranking the coders who answer the questions and problems posted.

Their analyze shows that London has the highest number of top Stack Overflow members, with 394 that have a reputation over 5,000.

Another ranking based on the average country ranking of Stack Overflow users above the 5,000 threshold shows that Bulgaria has the highest average reputation among top users in the
world.

 

I have no idea how correct is this analyze, but I’m glad to see finally something IT related, where Bulgaria is #1 in the world 🙂

Temporary suspension of the bank payments to Fibank

 

Few months ago we found that Fibank do not charge any taxes on the income payments and we opened account there, everything ran smoothly until last week.

One of our politics who own media group decided to attack through his newspaper his recent partner who is owner of one of the banks here named KTB.

The effect was panic and for one day people withdraw about 300 millions of EUR from KTB and this bank closed doors and asked Bulgarian National Bank for protection. Other people saw in this good opportunity to use this panic for their own interests and decided to apply same to Fibank which is the biggest bank with pure Bulgarian capitals. For 2 days 400 millions were withdraw from Fibank and although everyone says calm down, everything is under control since Friday we can’t log in the online banking system and there are tails of hundreds of peoples at the bank offices.

So for the moment we will stop the bank payment option from our web site, or have to revert to bank payment to our old bank account in United Bulgarian Bank which charges EUR 15-30 for all income transfers.

All this panic is artifical and we expect everything to calm down for a week or two, but we can’t operate with Fibank account till then, so we apologize for the inconvenience happen, but we will not be able to see your payment (on old orders which are paid by bank) nor to accept new orders with bank payment for the next 1-2 weeks, we will blog when we enable again these payments.

 

EDIT: at 10.00 the online banking in Fibank works again, so we can see if payments arrive, but we will wait couple of days before enable the bank payments again