Russian - Estonian business relations seem to be getting back on track.....

From the St Petersburg Times, Friday September 19

Police Bust Estonian Vodka Pipeline Gang

By Galina Stolyarova

Staff Writer

Eleven suspects in the Estonian town of Narva are facing charges of laying an illegal two-kilometer-long vodka pipeline along the bottom of a firewater reservoir on the Russian-Estonian border.

“It might sound weird and unbelievable but it is a very real criminal case,” Mari Luuk, a spokesman for the Estonian prosecutor’s office, told reporters.

The homemade poor-quality booze was smuggled from Russia to Estonia to be subsequently sold on the black market to avoid paying taxes. The prosecutors estimate that the scheme implemented by the criminal gang allowed them to avoid paying 57,000 euros ($81,000) in taxes.

Alcohol prices soared in Estonia after the country joined the European Union in May 2004. Vodka, in particular, is on average one and a half times more expensive in Estonia, compared to Russian market prices.

The criminal scheme first came to light in November 2004 when the Estonian tax police discovered a lorry in Tallinn loaded with 1,159 liters of undeclared vodka which the officers alleged had come through the underwater pipeline.

“The investigation has established that in November 2004 the suspects attempted to sell some of the smuggled alcohol in Tallinn but owing to the low quality of the product they failed to find customers.”

The prosecutors said the booze was later sold in Tartu, Estonia.

The suspects, if found guilty of smuggling, face up to five years in prison. Several of the suspects are Russian citizens, and the rest are Estonians.

The vodka pipeline is not the first of its kind and the town of Narva is not new to this extravagant smuggling technique.

A similar scandal broke in 2006 in the same region when Estonian customs officers discovered an illegal vodka pipeline which had been laid on the bottom of Narova river.

The Russian Embassy in Tallinn told Noviye Izvestia newspaper that the suspects, who hold Russian citizenship, have not yet contacted them for any help or advice.

Bootleg, low-quality alcohol abounds not only in cities across Russia but in Estonian towns near the Russian border. According to various estimates, approximately 20 percent of Estonians are believed to purchase bootleg booze.

The Estonian government plans to raise taxes on alcohol in the near future because the Baltic state of 1.4 million people is struggling to overcome a serious drinking problem.

According to official statistics, each Estonian consumes on average 12 liters of pure alcohol per year, and the amount of alcohol has been steadily rising in recent years.

Every year, between 1,500 and 2,000 people die from alcohol-related causes and illnesses in Estonia, including lethal poisoning by bootleg liquor.