Tax Board Seeks Solution for Illegal Fuel Trafficking

Photo: Postimees/Scanpix
4/13/2012 10:50 AM
Category: Economy

The Finance Ministry is looking for ways to stop the massive imports of cheap motor fuel from Russia to Estonia.

Estonia loses tens of millions of euros per year in excise duty, according ot the Tax and Customs Board. But illegal trade in Russian fuel alleviates social and economic hardship for many in eastern Estonia, especially after the closure a few years ago of the 12,000-worker Kreenholm factories, reported Postimees.

Motor fuel costs roughly half as much in Russia as in Estonia. The most active fuel traffickers use large vans with a standard fuel tank size of 170 liters, which means one trip to Russia can bring in around 100 euros in profit. Some make the trip up to 25 times per month.

Latvia and Lithuania prohibit citizens from entering their countries through Russia with a full tank of gas more than once a week. Otherwise they must declare fuel imports to tax authorities at the border.

Since Latvia enforced the new law at the beginning of this year, many Latvians have begun making the fuel trip through Estonia instead (since there are no border checks in the Schengen zone). The Tax and Customs Board estimates that 60 percent of those entering Estonia at the Estonian-Russian border point closest to Latvia are Latvian residents (about 500 vehicles enter Estonia at that point every 24 hours).

But in Estonia, the problem is also complicated by the proximity of the bordering twin towns - Narva and Ivangorod. And fuel is not the only major blackmarket good.


Ott Tammik

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