Bulgarian border stores fend off closure threat

Tina Milton

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Finance minister Plamen Oresharski has saved Bulgarian duty-free border shops from a requirement to close by the International Monetary Fund

Bulgarian duty-free shops have won a reprieve from an International Monetary Fund (IMF) decision to close the country's border stores. Retailers will instead operate under tighter controls, according to an agreement between the IMF and the Bulgarian government.

An IMF delegation, lead by mission head for Bulgaria Hans Flickenschield, visited the country earlier this month to discuss a two-year agreement. One of IMF's requirements was to close all duty-free shops except those in airports, with Flickenschield claiming that duty-free shops increase corruption and divert money from the national budget. But after discussions with finance minister Plamen Oresharski, IMF agreed to forgo the closure request if stricter controls were implemented across the duty-free industry.

Bulgarian Duty Free Association president Radostin Genov commented: "According to [Flickenschield] this is the European practice and the existence of the stores is of no interest to the budget. This conflicts with the IMF policy for Bulgaria regarding its efforts to decrease the existing foreign trade balance deficit. According to the existing excise law, the duty-free business is regarded as export. If the border shops - which represent 90% of this business - were to close, a further deficit [in annual duty-free turnover] of €180m ($216m) would arise."