Greek threat to veto EU directive could save local border operators

Bill Lumley

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Border duty-free operators have moved a step closer to protection from the EU after Greece threatens to veto the entire EU Excise Duty Directive

The Greek government has threatened to veto the entire EU Excise Duty Directive unless it is amended to exclude a ban on border duty-free transactions. Earlier this month we revealed the threat to regional airports had diminished when the European Travel Retail Council (ETRC) reported that it had won widespread support for a redrafting of the wording of the directive (DFNIonline July 2). However, border duty-free operations remained under threat.

Unless all 27 EU states vote in favour of the entire directive it will effectively be quashed. But the prospects of the inclusion of a provision excluding duty-free border operations from the directive are now likely as it emerges that the Greek government has committed itself to vetoing the directive unless its own border duty-free operations are protected.

ETRC secretary general Keith Spinks told DFNIonline that Romania was looking increasingly likely to follow Greece’s line and threaten a veto unless a provision eliminating the threat to its border duty-free outlets was included in the directive.

Meetings with the rapporteur are due to be held in September and the directive will go to full plenary sessions in November. “If the vote calls for the provision to be adopted it will send a strong message to the European parliament,” said Spinks. “The issue is purely to maintain the status quo—we are not calling for new border shops.”

The most likely outcome with respect to border duty-free operations in the region is that finance ministers will provide derogation specifically for the aggrieved member states for five years, subject to a separate review in that time.

Duty-free sales on Greece’s borders with Macedonia, Bulgaria, Turkey and Albania bring in €56m ($87.4m) a year and account for 25% of retailer Hellenic Duty Free Shops’ duty-free turnover alone. Romania, meanwhile, has 35 duty-free shops on its borders with Moldavia, Serbia and Ukraine. It closed all these stores early in 2007 but reopened with new rules later in the year.

The provisions that may protect border duty-free operations in the respective European states including Greece and Romania are not expected to be extended to other countries with existing border duty-free operations such as Austria and Germany.