FOURTH SECTION
CASE OF S.C. SERVICE BENZ COM S.R.L. v. ROMANIA
(Application no. 58045/11)
JUDGMENT
STRASBOURG
4 July 2017
FINAL
04/10/2017
This judgment is final in the circumstances set out in Article 44 § 2 of the Convention. It may be subject to editorial revision.
In the case of S.C. Service Benz Com S.R.L. v. Romania,
The European Court of Human Rights (Fourth Section), sitting as a Chamber composed of:
Vincent A. De Gaetano, President,
András Sajó,
Nona Tsotsoria,
Paulo Pinto de Albuquerque,
Krzysztof Wojtyczek,
Egidijus Kūris,
Gabriele Kucsko-Stadlmayer, judges,
and Marialena Tsirli, Section Registrar,
Having deliberated in private on 24 May 2016 and 16 May 2017,
Delivers the following judgment, which was adopted on the latter date:
PROCEDURE
1. The case originated in an application (no. 58045/11) against Romania lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Romanian commercial company, S.C. Service Benz Com S.R.L. (“the applicant”), on 15 August 2011.
2. The applicant was represented by Ms M. E. Marzavan, a lawyer practising in Bucharest. The Romanian Government (“the Government”) were represented by their Agent, Ms C. Brumar, of the Ministry of Foreign Affairs.
3. The applicant company complains about the confiscation by the Romanian authorities of its two fuel tankers, which they allege were confiscated despite the fact that they had committed no offence and no fault on their part had ever been lawfully established. In that connection, the company relied on Article 6 of the Convention and Article 1 of Protocol No. 1 to the Convention.
4. On 18 December 2012 the application was communicated to the Government.
5. Following the withdrawal of Ms Iulia Motoc, judge elected in respect of Romania (Rule 28 of the Rules of Court), Mr Krzysztof Wojtyczek was appointed to sit as an ad hoc judge (Article 26 § 4 of the Convention and Rule 29 § 1 of the Rules of Court).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
6. The applicant company, Service Benz Com S.R.L., is a Commerciale company founded in 1993 under Romanian law and based in Adunaţii Copăceni.
7. On 11 May 2010 the applicant company, whose main activity is the retail distribution of fuel in specialised outlets, entered into a contract with company “N.” SARL for the carriage of “automobile lubricants and other goods”. The contract stipulated that it was incumbent on the company N. to “complete the transport documents with the requisite, correct and accurate information”.
8. On the same day, two fuel tankers belonging to the company S.C. Service Benz Com S.R.L. were loaded in Bulgaria, in the presence of a tax office representative. After the tankers had been loaded the representative sealed them.
9. Before the two fuel tankers could reach their destination, they were stopped for inspection by representatives of the Romanian fraud squad. After laboratory analyses, the Romanian authorities found that the liquid transported did not have the same specifications as those indicated in the transport documents.
10. By official report of offence of 7 June 2010, the fraud squad representatives decided to:
– impose on the company “N”, the owner of the goods carried, a fine of RON 100,000 (approximately EUR 23,000) for non-compliance with the regulations on goods subject to excise duty pursuant to Article 220 § 1 (k) of the Code of Tax Procedure (“CPF”); and
– confiscate the goods (the liquid carried) and the two fuel tankers belonging to the applicant company, pursuant to Article 220 § 2 (a) and (b) CPF.
11. The applicant company challenged the part of that official report relating to the confiscation of its two fuel tankers. Before the Slobozia Court of First Instance it argued that:
– it had only carried its customer’s goods and accordingly held no responsibility for their compliance with the law;
– Article 220 § 1 (k) CPF had not been applicable to it since, according to the transport documents in its possession, it had not been transporting goods subject to excise duty.
12. By judgment of 15 November 2010 the Slobozia Court of First Instance allowed the applicant company’s challenge and annulled the part of the official report relating to the confiscation of the fuel tankers. The trial court held as follows:
– the transport company’s responsibility could not be incurred because it had not been in a position to verify the legal conformity of the goods and a tax office representative had sealed the two fuel tankers after loading; and
– in the instant case the confiscation had therefore been unacceptable and unlawful.
13. The tax authorities appealed against that judgment.
14. On 28 February 2011 the Ialomiţa County Court allowed the tax authorities’ appeal: it quashed the judgment and, ruling on the merits, dismissed the applicant company’s challenge as being ill-founded. The court reasoned as follows:
– the administrative offence laid down in Article 220 § 2 (b) CPF authorised the ancillary penalty of confiscation, without specifying whether the property to be confiscated belonged to the administrative offender or to a third party;
– furthermore, Articles 24 and 25 of Government Ordinance No. 2/2001 of 12 July 2001 governing administrative offences provided for the eventuality of the confiscated property belonging to someone other than the administrative offender.
The court gave the following reasons for its judgment:
“... the owner of the confiscated property, the company Service Benz Com SARL, is not an administrative offender, such that there is no need to [discuss] any fault on its part; the confiscation is conducted exclusively in pursuance of the law as an ancillary penalty; it can only be annulled in the event of breach of the relevant legal provisions.
The ground of appeal based on negligence on the part of the transporter, who was directly responsible for the safety and lawfulness of the goods transported, is also well-founded.”
II. RELEVANT DOMESTIC LAW AND PRACTICE
15. The relevant part of Government Ordinance No. 2/2001 of 12 July 2001 governing administrative offences reads as follows:
Article 1
“The law on administrative offences defends social values which are not protected under criminal law. An administrative offence is an act which is committed negligently and is foreseen and penalised by law, under a Government Ordinance or, if appropriate, by decision of a municipality [or] city ....”
Article 5
“(1) Main or ancillary administrative penalties may be imposed.
(2) The main administrative penalties are as follows:
...
(b) administrative fine;
...
(3) The following are ancillary administrative penalties:
(a) confiscation of property originating in, or used or intended for, the commission of the administrative offences.”
Article 24
“(1) Officers imposing a fine shall also order the confiscation of the property originating in, or used or intended for, the commission of the administrative offences. ...
(3) Officers imposing the penalty must identify the owner of the confiscated property, and, if the latter belongs to a person other than the administrative offender, must, if possible, include in the official report the owner’s personal details, or else the reasons for which he or she could not be identified.”
Article 25
“(1) A copy of the official report shall be presented to or, if appropriate, served on the administrative offender and, where necessary, the injured party and the owner of the confiscated property.”
16. The relevant provisions of the Code of Tax Procedure in force at the material time read as follows:
Article 220 – Administrative offences and penalties in the sphere of good subject to excise duty
“1. The following acts are administrative offences:
...
(k) transporting goods subject to excise duty without the accompanying document — DAI — provided for in Section VII of the Tax Code, or goods in respect of which the document has only been partly completed or comprises data which do not correspond to the actual quantity, the CN code or the transport document, as well as transporting products subject to excise duty by means of tanks or recipients which are unsealed or have damaged seals.
2. The offences mentioned in the first paragraph shall be subject to a fine ... and:
...
(b) confiscation of the tanks, recipients and means of transport used to carry the goods subject to excise duty [under the conditions described] in paragraph 1 (k) above.”
17. The Romanian Constitutional Court, as the “guarantor of the supremacy of the Constitution”, must interpret domestic legal provisions in the framework of its scrutiny of the constitutionality of legislation.
It has on several occasions dealt with the issue of the constitutionality – vis-à-vis protecting ownership rights – of the provisions of Article 190 § 2 (b) CPF, later Article 220 § 2 (b) CPF, in so far as those provisions authorise the confiscation of property potentially belonging to persons other than the administrative offender.
In its Decisions Nos. 685 of 16 November 2006, 603 of 19 July 2011 and 1521 of 24 January 2012, it ruled that those provisions were not unconstitutional, having regard to the following factors:
– by entrusting the confiscated means of transport to the administrative offender, its owner had accepted the risk that the latter would use it in a manner that was dangerous to society;
– the owner of the confiscated property could in any case obtain compensation from the administrative offender for the damage caused, by means of a legal action based on the contract entered into with the latter;
– a different interpretation would make it easy to circumvent the legal provisions, given that the administrative offender could plead in his defence that he had only held possession of the means of transport by permission, such that the unlawful transport activity could continue.
18. At the material time civil contractual liability had been governed by the provisions of Articles 1073 - 1090 of the Romanian Civil Code. Romanian case-law considers that civil contractual liability, including in the sphere of transport law, can only be engaged where several conditions have concurrently been fulfilled, that is to say damage, an unlawful act, negligence and a causal link between the act and the damage (see Gheorghe Piperea, Dreptul transporturilor, All Beck publishers, 2005, p. 50-51).
19. The relevant provisions of the Commercial Code as in force at the material time read as follows:
Article 416
“The forwarder is required to hand over to the transporter the customs papers and any other necessary documentation; the former is responsible for the content and lawfulness of those documents.”
20. The relevant provisions of the new Civil Code, which was published in the Official Gazette on 24 July 2009 and then republished on 15 July 2011, coming into force on 1 October 2011, read as follows:
Article 1961 § 3
“The forwarder is liable vis-à-vis the transporter for any damage caused by a defect in the goods or for any other omission, shortcoming or incorrect entries in the transport document or, where appropriate, in any additional documents. The transporter is [liable] vis-à-vis third parties for any damage thus caused, but can file an action for damages against the forwarder.”
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 TO THE CONVENTION
21. The applicant company submitted that the confiscation of its two fuel tankers amounted to a violation of its right to respect for its property as secured under Article 1 of Protocol No. 1 to the Convention, and that it had not benefited from a fair trial within the meaning of Article 6 of the Convention.
The Court notes that the applicant company’s main complaints concern the confiscation of the vehicles. It considers therefore that the application should be analysed solely under Article 1 of Protocol No. 1 to the Convention (see Andonoski v. the Former Yugoslav Republic of Macedonia, no. 16225/08, § 19, 17 September 2015). That provision reads as follows:
“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”
A. Admissibility
22. The Court notes that the application is not manifestly ill-founded within the meaning of Article 35 § 3 (a) of the Convention. It further notes that it is not inadmissible on any other grounds. It must therefore be declared admissible.
B. Merits
1. The parties’ submissions
23. The Government accepted that the confiscation of the applicant company’s fuel tankers amounted to an interference with its property rights. They nevertheless considered that:
– that interference had been prescribed by law, that is to say Article 220 §§ 1 (k) and 2 (b) CPF; those provisions had been accessible and foreseeable, particularly given the applicant’s status as a company with extensive experience in the field of fuel for motor vehicles (see paragraph 7 above);
– the interference with the right of ownership had pursued a legitimate aim, that is to say preventing tax evasion in the sphere of petroleum products and thereby improving the state of public finance;
– a fair balance had been struck between the public interest and the interests of the applicant company.
24. On the latter point, the Government explained that:
– although a major penalty had been imposed on the applicant company, certain restrictive measures could be applied to private property, such as those concerning items of property which had been the instruments, or embodied the proceeds, of the commission of criminal or administrative offences;
– in the present case the confiscation had concerned not just any vehicle unconnected to the offence noted, but two fuel tankers which, having regard to the applicant company’s stated business activities, could reasonably have been thought to have been used for transporting fuel;
– regard should also be had to the fact that by entering into a contract with the company N., the applicant company had accepted the risk of any unlawfulness in the latter’s activities, in view, in particular, of the following factors: the nature of the goods carried (petroleum products, which type of goods was frequently the subject of tax evasion), its status as a professional firm involved in retail distribution of fuel, its long experience in that sphere (the applicant company had been set up in 1993), and its obligatory acquaintance with the relevant legal provisions;
– the tax authorities had had no discretionary power as regards the appropriateness of ordering confiscation, which was required by law in cases of such offences (see, to converse effect, Waldemar Nowakowski v. Poland, no. 55167/11, § 51 in fine, 24 July 2012).
25. Finally, the Government emphasised that the applicant company could have sought redress from the other party to the contract, in the form of compensation for the damage suffered following the confiscation of the fuel tankers. They submitted that:
– the transport contract entered into with that company laid down that it was incumbent on the company N. to “complete the transport documents with the requisite, correct and accurate information” (see paragraph 7 above);
– accordingly, the applicant company had been at complete liberty to bring an action for damages in contract before the domestic courts if the company N. had refused to pay compensation.
26. The applicant company, for its part, considered that the confiscation of its property had had no legal basis in domestic law. It submitted that:
– the domestic authorities’ interpretation of the combined effect of the provisions of paragraphs 1 (k) and 2 (b) of Article 220 CPF was erroneous as far as it was concerned, since, according to the transport documents, the cargo which it was supposed to be carrying had not consisted of goods subject to excise duty;
– the fuel tankers had been sealed after loading, such that even the tax authorities had taken some time to verify the nature of the goods transported;
– under those circumstances, no fault, lack of diligence or mala fide could be attributed to it;
– it emerged from its activities on the Romanian market for the past twenty years that it had never, at any stage, attempted to evade tax;
– it was strange that the County Court had not taken the trouble to verify whether there had been any fault on its part, and had confined itself to formalistic application of the law.
2. The Court’s assessment
a) General principles
27. The Court reiterates that Article 1 of Protocol No. 1 to the Convention, which in substance guarantees the right of property, comprises three distin
