Romania To Shut Down Duty-Free Shops Upon License Expiry

The Finance Ministry will no longer license regular and diplomatic duty-free shops, while current licenses are set to expire in five years from their release date.

Reports by the national customs authority, the financial guard, the customs police force and the general police inspectorate show that duty-free shops were significantly involved in merchandise trafficking in 2009.

According to data provided by the Minister of the Interior and the country’s fiscal administration agency, 93% of all cigarette acquisition receipts were forged and over 40% of all confiscated cigarettes came from duty-free shops.

Duty-free operators make insignificant contributions to the state budget, and some post negative results in order to avoid paying the direct tax. Shops dodge check-ups by listing China, India, Dubai or Egypt as the countries of origin for their merchandise. In fact, most duty-free shops traffic cigarettes from countries with lower tobacco prices, such as Ukraine, Moldavia and Serbia. According to the financial guard, the cigarette black market is particularly active at Romania’s northern borders with Ukraine and Moldavia, as well as in the international Black Sea port of Constanta, southeastern Romania.

On May 19, the Government announced that duty-free shops will only be allowed to sell certain amounts of tobacco and alcohol to individual buyers, for personal use. The annual authorization taxes for duty-free shops or duty-free retail aboard aircrafts were also increased to EUR100,000 from EUR10,000.

In early 2010, the Finance Minister order duty-free agents to clear all remaining alcohol and tobacco stocks within 45 days, and then to completely cease selling such products. However, the order was repealed in court.

Duty-free merchandise is exempt from excises and VAT.