ETRC clarifies position of Bulgarian border stores

Tina Milton

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The European Travel Retail Council has clarified several issues raised in a recent letter from the European Commission to the Bulgarian Ministry of Finance

The European Travel Retail Council (ETRC) has clarified several points made in a letter sent by the European Commission director general of tax and customs Robert Verrue to the Bulgarian Ministry of Finance about the status of the country's duty-free border stores. 

ETRC Secretary general Keith Spinks said: "Mr Verrue does call for the closure of shops on the borders with other EU countries. However, the letter is in response to a query from the Bulgarian Finance Minister regarding the status of border shop with third countries - Serbia and Turkey -after Bulgaria becomes a full member of the EU. The letter states these border shops can only sell to travellers departing Bulgaria as these sales would still be classified as exports. They can no longer sell duty-free goods to travellers arriving in Bulgaria as the shops are located on the fiscal territory of Bulgaria and must therefore be subject to Bulgaria duties and taxes. He did not state that the border shops with Turkey must be closed."

Spinks continued: "Verrue called for the closure of the shops on EU borders and a halt to sales to arriving travellers in advance of full accession planned for January 1, 2007, but in my view this is not enforceable unless Bulgarian authorities decided to abide by the Commission's recommendations. Finally this is a clear restatement of the European Commission's position on duty-free arrivals shopping in the EU."

Bulgarian Duty Free Association president Radostin Genov commented: "His [Verrue's] letter was regarded as scandalous within the framework of Bulgarian business circles and provoked a negative impact over the desire of Bulgarian business to compete on equal terms with its EU partners. The operators will sentence the state to pay large amounts of compensation, if the government is going to follow the requirements in Verrue's letter."