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Belarus President looks into advisability of reopening duty-free shops

MINSK, 6 September (BelTA) – The advisability of reopening Belarusian duty-free shops should be scrutinized, said President of Belarus Alexander Lukashenko at the government session held on 6 September to discuss the operation of Belarusian duty-free shops.

The head of state remarked that a strategic decision on the operation of duty-free shops was needed. He reminded that most of the shops had been shut down several years before after a large-scale auditing campaign carried out by the State Control Committee. Only some of them stayed open in the city of Minsk for the diplomatic corps and at the National Airport Minsk for airline passengers. It was said back then that duty-free shops systematically violated the law and negatively affected the domestic commodity market, they spread corruption practices in the customs service, the border service, among local level government executives and in other areas.

According to Alexander Lukashenko, the attitude to duty-free trade has changed radically lately. The government bodies that used to be strictly opposed to these shops now favor their reopening. “Why is that?” wondered Alexander Lukashenko.

Those in favor say that duty-free trade is a good way for Belarus to earn hard currency and is another opportunity to sell domestic products. “Besides, our neighbors in the West have increased duty-free trade via a chain of shops located at motorway and railway border checkpoints. So we have to keep up,” said the head of state. 

Alexander Lukashenko remarked he had repeatedly instructed the Council of Ministers, the Presidential Property Management Directorate, the National Bank and the State Control Committee to work out a coordinated view on the operation of duty-free shops. “The matter is important, we cannot avoid it. This is why we need yes or no. It is the purpose of today’s session,” said the President.

A draft regulation on duty-free shops had been forwarded to the head of state for signing. “Judging by the document nobody doubts the advisability of reopening these shops but conditions of private business operation in this part of the market have revealed polarity of views of some government agencies. There are other problems, too,” stated Alexander Lukashenko.

The head of state reminded that in 2005 the State Control Committee carried out several audits in five duty-free organizations and 21 duty-free shops. The Committee also monitored alcohol sales at these shops for two days 24 hours a day. It turned out that the bulk of the alcohol, about 60%, was made available on the home market, illegally. In turn, products of Belarusian make accounted for only 0.2% of the trade turnover of the duty-free shops. “In essence these shops were used to illegally sell alcohol products in Belarus. Customs officers, who had access to customs clearance stations, were involved in the operation,” said Alexander Lukashenko. He remarked that this led to criminal corrupted areas sprouting all over the country, including at the border.

The head of state remarked that duty-free shops had enjoyed considerable tax preferences. “If you leave the country, feel free to buy Belarusian goods, vodka, and take it anywhere you like. The country should have earned much more foreign currency from it. Instead alcohol and other goods were sold domestically in huge amounts”.

Alexander Lukashenko remarked that duty-free shops had been designed to sell Belarusian products, but they traded mainly in imports on preferential terms. In his words, the situation has changed little since then. “Domestic goods account for about 5% of the trade turnover in the shops that have been allowed working. Are you saying I should play this game for 5% and are you trying to convince me that the practices seen back then will not be resumed?” Alexander Lukashenko asked participants of the session. “Do I need that? I don’t. Does the country need it? It doesn’t. Maybe Belarusian people need it? They don’t”.

“I would like to hear reasons as to why we have to do it, who will benefit from it, what the state will get, how much foreign currency the country will earn,” said the President.

The head of state made it clear he wanted to hear concrete answers to these questions.