Bloomberg News

Estonia’s Supreme Court Partially Annuls Fuel-Trading Rules

February 02, 2012

Feb. 2 (Bloomberg) -- Estonia’s Supreme Court partially annulled legislation introduced in 2011 to stamp out fraud in the fuel industry in a move that may bring litigation from retailers and wholesalers.

The transition period to adopt last April’s regulations was insufficient, the court ruled, meaning they won’t apply to companies registered before then until a new one can be determined, according to a statement on its website yesterday from the capital, Tallinn.

The court also canceled a clause exempting companies created three years ago or more from depositing a minimum of 100,000 euros ($131,000) with the tax board in order to be registered, calling the provision unconstitutional.

The Baltic nation drew up the rules to prevent companies from importing fuel and declaring bankruptcy shortly afterwards without paying value-added tax. VAT revenue from the fuel industry was 50 million euros more than the year-earlier period in the second half of 2011, the Postimees newspaper reported today, citing Finance Ministry officials.

While the ministry won’t have to alter the regulation requiring security from fuel traders as it still applies to newly created companies, it will need to adjust its policy as regards the clauses annulled by the court, Marek Uuskula, head of the excise-policy department, said today in an e-mailed response to Bloomberg questions.

Companies that provided cash as security or were forced out of business because of the requirement may seek repayment and damages, Helmut Pikmets, a managing partner with the VARUL law company in Tallinn, said today by e-mail.

Pikmets represented the plaintiff, Korvekula Tankla OU, in the case against the state that prompted the court’s ruling. As Estonia’s highest court, its decision is final.

--Editors: Andrew Langley, Alan Crosby

To contact the reporter on this story: Ott Ummelas in Tallinn at oummelas@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net


Tim Cook's Reboot
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus