Regulatory Fees Declared Unconstitutional in Estonia

The Estonian Constitutional Court has issued its ruling today confirming the unconstitutionality of the new EU-CEG fees applicable for cigars as of 1 January 2025 in Estonia, already found by the Administrative Court in 27 November 2025:

1. declare subsections 2 and 3 of § 298 ⁴ of the State Fee Act unconstitutional and invalid insofar as they establish the obligation to pay state fees for cigar manufacturers and importers.

2. declare subsection 4 of § 10 ⁴  of the Tobacco Act unconstitutional and invalid insofar as it establishes an obligation to pay a fee for cigar manufacturers and importers, as well as insofar as it obliges to pay a fee for the sales volume report submitted for 2024 with retroactive effect; 

3. declare subsection 298 ⁴ (1) of the State Fees Act unconstitutional.

For the reminder, the Estonian Parliament adopted the following fees:

§ 298⁴.  Notification of tobacco products and products related to tobacco products

(1) A statutory fee of 5000 euros is paid for consideration of a notification of tobacco products and products related to tobacco products.

(2) A statutory fee of 740 euros is paid for amendment of a notification of tobacco products and products related to tobacco products.

(3) A statutory fee of 100 euros per year is paid for publication and storage of a notification of tobacco products and products related to tobacco products.

Tobacco Act, § 10 ^4. State fee for reviewing, amending, publishing and storing a notice and fees for evaluating information

(4) When submitting a report on the sales volumes of a tobacco product and a product related to a tobacco product, the person submitting the report shall pay the Health Board 240 euros for the assessment of the report

Article 5 of the EU Tobacco products Directive established a reporting and notification system, the EU Common Entry Gate (EU-CEG), requiring manufacturers and importers of tobacco products to submit to the competent authorities of the Member States concerned information on the ingredients and emissions of tobacco products, and on their sales volumes.

The Court found that such levels of fees disregarded the specificities of cigars production and the extremely limited amount of ingredients (tobacco and vegetable gum); the levels of fees were disproportianate and far exceeded the actual costs incurred by the Health Board to review or maintain the notification; disregarded the differentiation principles of the Tobacco Products Directive, and that the fee for the notification of the sales volumes report had a retroactive effect which was illegal.

Margus Reiland, legal representative in the case and attorney-at-law at WIDEN, noted that the decision provides important clarity regarding the legal framework governing state fees imposed on cigars. “We welcome the Supreme Court’s clear and well-reasoned judgment confirming that the imposed state fees were unconstitutional. In light of this decision, affected companies should in principle have the possibility to reclaim the state fees they have paid. However, such claims are subject to procedural requirements and statutory deadlines under Estonian law, and it is therefore important that companies assess their position and act without undue delay.”

The Ministry of Justice and Digital Affairs has already begun preparing a draft law to resolve the issue.

The case received the support of Sigari Maja, Dannemann and J.C Newman.

Paul Varakas, Director General of the European Cigar Manufacturers Association:

“This decision brings clarity and continuity to an issue that has been continusouly recognised across jurisdictions: cigars are not mass-market products and should be treated differently.

Due to their small batch nature and traditional production, cigars should have never been applied e-cigarette-style and mass-market tobacco product regulation. While this is clearly good news, it is also a sad reminder that small and medium sized family-owned businesses often need to resort to litigation to have their voices and facts heard.

The Court relied on the clear differentiation principles enshrined in the Tobacco Products Directive, reaffirming the importance of evidence-based engagement.

Today’s ruling is a relief for cigar manufacturers, small business retailers, and adult consumers in Estonia. But we are not done. ECMA, its members and partners will continue working to ensure that cigars remain protected from unnecessary and inappropriate regulation – including in the upcoming revision of the EU Tobacco Products Directive. But today, we take a moment to recognise what this decision represents: proof that sustained and united advocacy works.”