SMELL OF PETROL IN THE DUTY-FREE SHOPS SCAM
OWNERS OF FILLING STATIONS ALONG INTERNATIONAL MOTORWAY E-80 LED TO BELIEVE AGAIN THAT THE GOVERNMENT COULD RESCUE THEM FROM FUAT GYUVENThe question regarding duty-free trade in fuels remained somewhat aside on the background of the arguments for duty-free shops (pointed out as one of the reasons for the resignation, handed by Finance Minister Milen Velchev). Recently, however, the conflict between owners of petrol stations along the international motorway E-80 on one side, and the businessman of Turkish origin Fuat Gyuven on the other side, has been gaining speed again. Duty-free filling stations can be counted on one hand's fingures, but according to various estimates they drain the Treasury not less than the duty-free shops. In addition to the above-mentioned Fuat Gyuven, Vassilev Bros. OOD is also licensed for such activities, but tension is caused mostly by the tanking devices of Shipka Fuat Gyuven on the territory of the Free Trade Zone of Svilengrad and at the border check-point of Kapitan Andreevo. The former emigrant from the region of Kurdjali, Gyuven, also has duty-free petrol stations at Kalotina and the Free Trade Zone of Vidin. The entrepreneur is also a majority holder of the Haskovo-based company Aidatour, the owner of duty-free shops at the Bulgarian-Turkish border. A check-up in the informational system Daksi shows that Fuat Gyuven holds as well 75% of the shares in Gama Invest AD, registered in Sofia. And the company Stil-93, controlled by him, has acquired in 2003 the electricity power station in Lovech.Fuat Gyuven's first duty-free petrol station was opened back in 1993 in the Duty Free Zone of Svilengrad. A ten-year contract was then signed between the Finance Ministry and Magazin Shipka Fuat Gyuven EOOD. By that contract the State's budget voluntarily gives up millions of revenues, as the money is reimbursed to the company after it presents to the tax authorities a report about the sold quantities of fuel. That is so because under the regulations for the application of the Excise Duty Act and of the VAT Act, the diesel oil traded in duty free zones is acknowledged as export. Thus, diesel oil is sold at some USD0.30/litre there and long queues of TIR-trucks driving from and to Bulgaria form there. The turnover of Gyuven's companies ranks him in the list of the top 3 exporters from the region of Haskovo and in the top 100 leading companies in the entire country. At the same time, the thin Republican budget loses BGN210 of excise duty from each ton of diesel, purchased from his filling stations and about BGN205 from VAT. The Treasury is also deprived of the road fee of BGN180/ton and the ecology fee of BGN14, which are not paid by the TIR-trucks that feed their tanks with duty-free fuel. According to information from the protesting dealers in petrol products in the regions of Svilengrad, the four filling stations of the Turkish businessman sell some 24,000 tons of diesel oil on average every month. Thus, it could be calculated that the Treasury is deprived of BGN14,652,200 each month, or BGN175,800,000 a year. Just for comparison, the growth of customs proceeds for 2002 as compared to 2001 was BGN 222MN. Fuat Gyuven's comfort was temporarily disturbed in 1999, when the currently effective Customs Act was promulgated. The law forbade the sale of excise goods, fuels included, in the duty free zones under customs control. However, this problem was quickly settled by amendments to the regulations for the application of the Excise Duty Act and of the VAT Act. In front of the BANKER weekly Fuat Gyuven himself denied that his contract has elapsed. He said his ill-wishers were not acquainted with the fact that he and the State had signed and annex for extending the term of the contract, closed in 1993. The deal, he explained, was a kind of a compensation for the period when his filling stations were forced to stop operations in 1999. Mr. Gyuven specified he was in Turkey and was not acquainted in detail with the current events in Bulgaria. As the BANKER has already written, he and MRF's leader Ahmed Dogan left for Bulgaria's southern neighbour two days after the news for Milen Velchev's resignation spread around. A provision in the Regulations for Application of the Excise Duty Act, promulgated in the Official Gazette Issue 33 of April 2003, is also to the advantage of Magazin Shipka Fuat Gyuven, pundits claim. The article in question stipulates that the agreement between the Finance Ministry and the owner of duty-free filling stations should be in force until Bulgaria's accession to the European Union. Of course, everything could change if the bill on the shut-down of the duty-free shops, recently drafted by the Finance Ministry stipulates closure of the duty-free petrol stations as well. According to people, close to the team that drafted the bill, December 31, 2003 was fixed in it as deadline for terminating Fuat Gyuven's privileges. It was this that inspired with hope the association (set up about a year ago) of several keepers of filling stations along the international motorway E-80 and made them undertake a massive lobbying campaign among representatives of the executive and legislative power. One of their proposals is to revoke para 4 of the Transitional and Final Provisions of the Regulations for Application of the Excise Duty Act (passed in 1999), stipulating that duty-free sale of fuel shall be acknowledged as export. Fuel dealers also demand an amendment to article 13 of the Decree on the Operation of Free Trade Zones, which should restrict the trade in diesel oil and petrol on their territory. They also inform about serious violations of the customs regime on the territory of the Free Trade Zone of Svilengrad. Customs officers turn a blind eye to the unsealed tanks, leaving the spot, they inform. Moreover, TIR-trucks feed their tanks with fuel after 20.00 hrs. when control in the Duty Trade Zone is in the hands of customs police, which have only security rights and cannot control the deals. A high-ranking official from the Customs Agency who demanded anonymity told the BANKER weekly that in fact a considerable part of the fuel which the TIR-trucks feed from the petrol stations, does not go out of the country. According to the same official, the crowning nuisance was the approval of amendments to the Excise Duty Act in end-2002 when the MPs were expected to tighten the petrol tap through which millions of budget money were flowing. This did not happen. Moreover, article 7 of the new para 10 in the Transitional and Final Provisions of the legislative act allowed Fuat Gyuven to sell fuel to the vehicles entering Bulgaria as well. The restriction in the same article, stipulating that they can feed only their own tanks, sounds absurd to the people, acquainted with that branch.