Romania Court Suspends Order Banning Sale Of Alcoholic Drinks, Tobacco In Duty-Free Shops

The court ruling is not irrevocable, but executory, and the ministry is entitled to challenge it with the Supreme Court.

The court ruling comes after commercial company SC E. SA submitted a request calling for the suspension of Order 202 issued by the Finance Ministry and effective as of February 12, 2010, which amends annex 6 to Finance Ministry Order 2007/2008 that includes the list of goods that can be sold in duty-free shops, by leaving out products like distilled alcoholic beverages, vermouth and other fermented beverages, as well as tobacco products, which, under the new Order 202/2010 can no longer be sold in duty-free shops and companies selling these products are obliged to exhaust their stocks within 45 days.

The company told the court its request to challenge Order 202/2010 came as a result of the ministry breaching the legal provisions regulating the company's rights, as holder of functioning licenses of duty-free shops located at the country's borders, which were obtained in accordance with the provisions of Government Emergency Ordinance 104/2002.

The company claims the ministry has overstepped the legal and constitutional competence, which ultimately restricted the company's economic freedom on the market, considering the Constitution clearly stipulates that any such rights can only be restricted through laws issued by the Parliament or another similar juridical act, arguing the Finance Ministry Order does not qualify as any such act.

The company's licenses were all issued by the ministry, in accordance with the provisions of Government Emergency Ordinance 104/2002, and are valid for a five-year period until November 11, 2012, during which the company is entitled to sell in its duty-free shops the products included in the aforementioned annex 6 to Order 2007/2008, including distilled alcoholic beverages, vermouth and other fermented beverages, as well as tobacco products.

Early February this year, sources close to the matter told MEDIAFAX that the Romanian Government empowered competent ministries to start drafting the normative act meant to limit the sale of cigarettes and alcoholic beverages in duty-free shops, in a move to crack down on illicit trade.

The Finance Ministry Order banning the sale of alcoholic drinks and tobacco products in duty-free shops came into effect on February 12, 2010.

In November 2009, Romania said it plans to discard tax incentives it granted to duty-free shops, which are exempt from customs duties, to stop issuing authorizations for new shops and raise the current EUR10,000 permit fee to a level that should discourage illicit trade.

In December 2009, the Government said it plans to limit the quantity of tobacco and alcohol that can be purchased for personal consumption by a single individual in duty-free shops, in a bid to reduce tax evasion and increase budget revenue.

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