Border-Hop Shoppers Face Uncertain Future (3)

Photo: ERR
10/18/2013 12:05 PM
Category: Economy

For years, Finns have been coming to Estonia for cheap alcohol while Estonians in the southeast have traveled to Russia for cheap motor fuel, but the tide has turned against the practices.

In Finland's parliament in the past week, MPs from different parties have been calling for better checks on whether the alcohol brought back by ferry passengers is really for personal use.

Arto Satonen of Kokoomus (Finland's National Coalition Party) said a full quarter of spirits in Finland come from Estonia as personal purchases, Helsingin Sanomat reported. A sizable faction supports raising the excise higher than the 2.3 percent agreed on. Fellow party member Jana Pekonen said the Finnish treasury loses out on 300 million euros of revenue each year due to the "alcohol tourism," a hallmark of Estonian-Finnish ferry lines since the 1990s.

One measure being considered is to enforce an import limit of 10 liters of spirits and 110 liters of beer, but it remains unclear what people with more than that amount would need to do to prove personal use.

'Two Tanks a Month' Bill Abandoned

The situation on the EU's external border is much less of a grey area, with strict import limits. But since fuel prices in Estonia started converging with those of the rest of the bloc, locals within driving distance of Russia in the lightly populated southeast had been driving across the border to fill up their gas tanks - that is, until the government cracked down on the practice last year.

The action, which in effect authorized customs officials to peer into gas tanks and ask drivers for proof that they needed that much fuel to get home, was applauded by local fuel sellers such as AS Mahta Kütus, a company that operates nine filling stations in the border region. It has seen sales shoot up by 40 percent since last summer, and Ennu Tammemägi, the company's director, has made the case that the key to keeping other businesses operating in the south is to drive out illegal activity and wheeling and dealing.

This week Parliament debated an initiative by a largely Reform and IRL group of southern Estonian MPs that would ease the restriction by allowing motorists to go across the border twice a month and fill up. The Finance Ministry estimated that the measure would deprive the state of only 5 million euros per year.

However, oddly, most of the MPs did not end up voting for their own initiative. Parliament's Seto region support group member Inara Luigas said: "The MP showed up only when all of the amendments had been voted on. It is a real shame, it would have been extremely important for southeastern inhabitants."

Finance Minister Jürgen Ligi was quoted on uudised.err.ee as saying that life on the border should be based on transparent economic activity, not trafficking in smokes, vodka bottles and Russian petrol. "That is no kind of 'Estonian Nokia.' Even if it were used for [importers'] own use, it would help the local economy die out. It would not generate well-being."


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