The Bulgarian Duty-Free and Travel Retail Association (BDFTRA) yesterday filed a formal complaint of 'maladministration' with the European Ombudsman regarding what it alleges as the European Commission's role in 'pressuring the Bulgarian government' to close

Bulgarian land border duty free shops and fuel stations in 2008. The BDFTRA has also confirmed that the complaint marks the beginning of the association's campaign to re-open the duty-free shops and fuel stations closed last year.

The complaint alleges that (a) the Commission made false allegations linking the Bulgarian duty free sector with corruption and organised crime; (b) refused to disclose receipt of detailed information challenging its allegations to the Bulgarian Government and Parliament prior to the approval of legislation closing duty free shops and fuel stations; and (c) delayed processing a formal BDFTRA request for information in order to repeat allegations against the duty free sector in a subsequent Commission report.

BDFTRA Chairman Radostin Genov said: ‘The Commission made very serious allegations against our members, which it has repeatedly failed to substantiate. It included these allegations in its Cooperation and Verification Mechanism reports to force the Bulgarian government to close duty free shops and fuel stations. It has since used every trick in the bureaucratic book to avoid admitting that the allegations were wrong. The Ombudsman needs to examine the actions of the Commission as a matter of urgency.

‘Closing duty free shops and fuel stations cost over 1,700 jobs in Bulgaria. Operators lost substantial investments, the state lost significant license and other tax revenues and domestic producers have lost an important export market. The only beneficiaries have been Turkish border shop operators, who have greatly expanded their operations since July last year,’ he added.

European Travel Retail Council (ETRC) Secretary General Keith Spinks encouraged the European Ombudsman to pursue the complaint as quickly as possible.

‘Any serious allegation of illicit trading in the duty free business must be substantiated. Many questions have been raised regarding the Commission's actions prior to the closure of duty free shops in Bulgaria. I hope that the Ombudsman can get to the bottom of this matter as quickly as possible’.

Spinks told TREND yesterday that the matter is a simple one where the Ombudsman needs to have access to any 'evidence' that is allegedly held by the Commission and which led to the duty free shops and fuel station closures. As mentioned earlier, this evidence has not been produced in any shape or form by the Commission to date.

BDFTRA's complaint is filed pursuant to Article 2 (maladministration) and Article 4a (failure to grant public access to documents) of the European Ombudsman's Statute[1]. Any subsequent investigation is expected to be completed within 12 months.

The background to this issue goes back to February 2008 when the European Commission made serious allegations against the operators of land border duty free shops and fuel stations in its Interim Report on the Progress of Bulgaria under the Cooperation and Verification Mechanism.

As a result, the Bulgarian Government put forward amendments in the same month to the 2006 Duty-Free Trade Act. These cancelled outstanding duty free licenses, forced the closure of shops and fuel stations located in the border control area on the country's border with FYROM, Serbia and Turkey and expropriated the buildings housing duty free shops and the fuel forecourts.

The BDFTRA subsequently challenged the European Commission on its allegations, providing verified official government data refuting specific allegations and demanding that the Commission publicly disclose information to support its other allegations or withdraw them. The Commission refused to do either.

The BDFTRA subsequently made a number of formal requests to access documents related to the CVM Interim Report, but claims that the Commission again refused to disclose these documents.

As a result, in May 2008 the Bulgarian Parliament approved the government's proposed amendments to the 2006 Duty-Free Trade Act and following this, all duty free shops and fuel stations at the country's borders with FYROM, Serbia and Turkey were closed with the loss of over 1,700 jobs.

Then on July 23 2008, the Commission repeated its allegations against the operators of land border duty free shops and fuel stations in its Report on the Progress of Bulgaria under the Cooperation and Verification Mechanism but it again provided no information to substantiate its allegations.