The controversy over Bulgaria’s Customs Agency’s actions against large-scale distillery and wine producer Vinprom Karnobat took a new turn on September 25 as top government and state officials pledged to fast-track legislation criminalising the production of goods subject to excise duties while failing to comply with excise rules.
The saga began in early September when special prosecutors pressed charges against Vinprom Karnobat owner Minyu Staykov and others for money laundering and tax evasion. The charges arise from, among other things, alleged illegal trading involving cigarettes and alcohol.
This past weekend, a large number of Vinprom Karnobat’s about 1500 employees held protests after the Customs Agency sealed three warehouses, with the agency saying that it had found a device on the premises to evade paying excise on spirit alcohol. This allegation has been rejected by the company management and employees.
On September 25, Bulgarian Finance Minister Vladislav Goranov, Interior Minister Mladen Marinov, Justice Minister Tsetska Tsacheva, Prosecutor-General Sotir Tsatsarov, Customs Agency chief Georgi Kostov and Danail Kirilov, head of the legal affairs committee in the National Assembly, met to discuss steps against contraband dealing.
Speaking after the meeting, Finance Minister Goranov said that he had called it as a result of recent discussions in the commission on control of revenue agencies and in Parliament, after which he had learnt that there were “certain gaps” in the Criminal Code.
It was necessary to create sufficient instruments to check and prosecute anyone trying to harm the treasury, Goranov said. He said that amendments would be considered “by the end of next week” to augment the law.
Tsatsarov said that the current law is against the possession and sale of goods subject to excise but which do not have excise labels, and would be changed also to criminalise the production of excise goods without excise labels, and production in violation of a licence.
Tsacheva said that officials from the Justice Ministry, working with representatives of the Prosecutor-General’s office and the Finance Ministry, would come up with the texts, which would be put to MPs for rapid approval.
Kirilov, a member of Prime Minister Boiko Borissov’s GERB party, said that the party would support these changes and he also would present them to the government coalition partners.
Against the background of the dispute over the purpose of the tap on a pipe at Vinprom Karnobat, Goranov said that the technical specifications for the licensing of the excise warehouse did not include this device.
Goranov said that laboratory tests had shown conclusively that the fluid extracted from this tap was 96 degree ethyl alcohol. Earlier, Vinprom Karnobat denied that the fluid at the tap was alcohol.
This past Sunday, a district court allowed the resumption of activities at Vinprom Karnobat, first the wine production and then others, including spirits. This effectively overruled a Customs Agency application to keep the warehouses sealed for a further 60 days.
Vinprom Karnobat have been active in the media to seek to portray themselves as on the receiving end of official malice and incompetence. During the weekend protests, employees asked why the crackdown had come at a crucial time for processing the grape harvest.
On public broadcaster Bulgarian National Radio on September 24, Zhanet Dimova, of the ad hoc committee of Vinprom Karnobat workers, alleged that the action against the company was on behalf of competitors, and she named another large alcohol production company.
“The state wants to crush us,” Dimova told BNR. She said that the two days of production shutdown had cost the company 10 million leva (about five million euro).
The company’s administrative director, Yovko Yovkov, insisted to journalists from Bulgarian major television stations the same day that the tap – which he showed to the cameras – was not used to evade excise duty. The same tap had starred in a video released by the Customs Agency on its website on Sunday.
“The tap is used for the annual maintenance of the facilities,” Yovkov said, adding that it had been installed a few years ago.
He said that the plan for the plant had been approved by the Customs Agency and tax warehouse licence had been issued in 2011. The plant was monitored annually by the agency, he said.
Yovkov described the sealing of the tap as “the most absurd sealing in the world”.
The director of the Customs Agency in the Bulgarian Black Sea city of Bourgas, Valeri Stefanov, told Nova Televizia that the tap had not existed and no permission had been granted for it to be installed. “Why it was discovered now, not years ago, is another matter. No one has closed his eyes. It is now that the violation was found,” he said.
(Photo: Tomasz Mazurkiewicz/freeimages.com)