Communicated on 27 September 2018
THIRD SECTION
Application no. 23079/11
AKTIVA DOO
against Serbia
lodged on 28 March 2011
STATEMENT OF FACTS
1. The applicant, Aktiva DOO, is a company based in Belgrade, Serbia. It is represented before the Court by Mr R. Kojić, a lawyer practising in Belgrade.
A. The circumstances of the case
2. The facts of the case, as submitted by the applicant, may be summarised as follows.
1. Inspection Control and Seizure of Goods
3. In the period between 12 November and 25 December 2004 the applicant imported 650,740 kg of concrete smooth iron rods and 252,800 kg of concrete corrugated iron rods (both will be referred to as “the goods”) from Ukraine. The import was lawful and the applicant paid the required taxes and customs duties. The goods were deposited in two depositories, in Smederevo and Pančevo.
4. In period between 26 and 31 January 2005 the Smederevo Sector of Market Inspectorate of the Ministry of Trade, Tourism and Services of Republic of Serbia (“the Inspectorate”) undertook an inspection of the depository in Smederevo, the applicant’s premises, accounting records and the premises of privately held accounting agency, which was in charge of the applicant’s accounting records.
5. In the course of the inspection the Inspectorate established that the applicant had failed to keep accounting records for 2004, to make an inventory of its goods at the end of 2004, and to list the goods in its accounting records for 2004. By failing to keep the records and make proper inventory, the applicant and its director had failed to comply with Section 1 paragraph 2 and 3 of the Rulebook on Records of Trade in Goods and Services, and Section 16 of the Law on the Conditions for Performance of Transport of Goods, Services and Inspection.
6. As for the goods, the Inspectorate established that the applicant had imported them, paid due customs and taxes, and deposited them in designated depositories, but had failed to list them in accounting records and make an inventory. Additionally, the Inspectorate determined that the applicant had sold a certain proportion of the goods from both depositories, in December 2004 and January 2005. The Inspectorate concluded that these sales had not been accounted for in accordance with the rules contained in the Rulebook and the Law, which omission of the applicant and its director amounted to a misdemeanour prescribed and punishable under the Law.
7. As a consequence, by two separate decisions rendered on 28 and 31 January 2005, the Inspectorate seized the goods from the applicant, and submitted a request for misdemeanour proceedings against the applicant and its director, as described below.
2. Seizure decision of 28 January 2005
8. By its decision of 28 January 2005 the Inspectorate seized 205,670 kg of concrete corrugated iron rods, deposited in Pančevo. The inspection determined that the seizure was temporary and that it presented a security measure until the end of the misdemeanour proceedings. The inspector also issued a confirmation of temporary seizure of goods. The applicant appealed even though the appeal had no suspensive effect.
9. On 7 February 2005 the Ministry of Trade, Tourism and Services (“the Ministry”), as the second instance body, rejected the applicant’s appeal and upheld the decision of 28 January 2005.
10. However, on 16 February 2005 the Inspectorate sold the goods (seized on 28 January 2005) to third company.
11. On 29 March 2005 the applicant initiated proceedings for judicial review before the Supreme Court of Serbia (“the Supreme Court”), seeking annulment of the decision of 7 February 2005. On 11 November 2005 the Supreme Court quashed the decision of 7 February 2005. Thereafter, on 1 March 2006 the Ministry annulled the decision of 28 January 2005 and remitted the case to the Inspectorate.
12. On 7 June 2006, following re-inspection, the Inspectorate rendered a second decision on the seizure of the concrete bars (already sold on 16 February 2005). The applicant appealed, but on 1 August 2006 the Ministry rejected the applicant’s appeal as unfounded, so on 20 September 2006 the applicant initiated proceeding for judicial review before the Supreme Court, seeking the annulment of the decision of 1 August 2006.
13. On 28 February 2007 the Supreme Court quashed the decision of 1 August 2006, so the case was again before the Ministry which on 3 July 2007 rendered a decision in which it annulled the decision of 7 June 2006 and remitted the case to the Inspectiorate for the third time.
14. Soon after, on 25 July 2007 the Ministry rendered a conclusion whereby two acting inspectors in the applicant’s case were disqualified from the pending inspection proceedings. The Ministry stated that there were separate investigations pending into the participation of those two inspectors in the seizure and sale of the goods.
15. On 12 September 2007 the Inspectorate rendered a third decision on seizure of the concrete bars. The applicant appealed, but the appeal was rejected as unfounded by the decision of the Ministry of 8 November 2007.
16. On an unspecified date in December 2007 the applicant again initiated proceedings for judicial review before the Supreme Court, seeking it to quash the decision of 8 November 2007, which rejected the applicant’s claim as unfounded on 5 March 2009.
17. On 20 May 2010 the applicant filed a constitutional appeal with the Constitutional Court of Serbia (“the Constitutional Court”). The applicant invoked Article 32 paragraph 1 and articles 33, 34 and 58 of the Serbian Constitution, which correspond to Articles 6 paragraph 1, Article 7 and Article 1 of Protocol No. 1 to the Convention. On 8 November 2011 the Constitutional Court rejected the appeal as unfounded.
3. Misdemeanour Proceedings against the Applicant and its Director
18. On 8 February 2005 the Inspectorate filed a motion for initiation of misdemeanour proceedings against the applicant and its director. The Inspectorate also proposed, as a protective measure, seizure of the goods.
19. On 3 January 2006 the Municipal Misdemeanour Judge in Smederevo found the applicant and its director guilty of a violation of Section 16 of the Law, and fined them in accordance with Article 53 paragraph 1.10 and paragraph 2 of the Law, with 25.000,00 RSD and 4.000,00 RSD respectively (as monetary fine) for the said offense, which decision both the applicant and its director appealed.
20. On 8 February 2007 the Smederevo Misdemeanour Chamber has reversed the 3 January 2006 decision and acquitted the applicant and its director due to fact that the offense in question became statute-barred in the meantime.
B. Final remarks
21. In a separate development, by its decision of 31 January 2005 the Inspectorate seized another amount of the applicant’s goods, deposited in Smederevo. The inspection also determined that the seizure was temporary and that it constituted a security measure until the end of misdemeanour proceedings, and issued a confirmation of temporary seizure of goods, but sold these goods, as well.
22. Following the applicant’s appeal in administrative proceedings, several remittals and judicial review proceedings before the Supreme and Administrative Court, on 10 April 2014 the Constitutional Court allowed the applicant’s constitutional appeal, quashed the last decision of the Administrative Court of 16 April 2013 and ordered a retrial.
23. Following two other retrials, on 17 December 2015, the Administrative Court rendered another decision in which it quashed decisions which followed the decision on seizure of 31 January 2005, and determined that the seized goods in this case are to be returned to the applicant.
24. In the course of 2015 the applicant was paid out, by the Ministry of Trade, Tourism and Telecommunications, the value of the goods which had been seized by the decision of 31 January and sold afterwards.
C. Relevant domestic law
1. Law on the Conditions for Performance of Transport of Goods, Services and Inspection (Zakon o uslovima za obavljanje prometa robe, vršenje usluga u prometu robe i inspekcijskom nadzoru, published in Official Gazette of Republic of Serbia, no. 39/96, 20/97 and 46/98)
25. Pursuant to Section 16 paragraph 1 companies and entrepreneurs, which deal with trade of goods and provide services in commerce are under an obligation to make records of sale of goods, delivery of goods and services, and to provide an access to such records.
26. Pursuant to Section 16 paragraph 3 the records are made based on documents on production, procurement of goods and services, sale of goods and other documents containing the amount and value of the sold goods.
27. Pursuant to Section 16 paragraph 5 companies and entrepreneurs from paragraph 1 cannot undertake either transport or sale goods, or provide services for which there is no properly prescribed content or which are not properly listed.
28. Pursuant to Section 42 paragraph 1 item 8.10 during the inspection control the Inspection has a right and duty to temporarily restrain by injunction the legal entity performing the activity by closing the premises where the activity is carried out or in any other appropriate manner in cases where the sale of goods is not listed in accordance with the regulations.
29. Pursuant to Section 44 paragraph 1 item 6 the inspector is authorised to temporarily seize the items that were used, intended to be used or resulted from the commission of an offense, an economic offense or a crime and issue a receipt/confirmation for seized items.
30. Pursuant to Section 45 paragraph 1 item 7 an inspector shall, by his decision, seize goods when it is established that the goods concerned are in trade, but are not properly inventoried.
31. Pursuant to Section 46 sales of goods referred to in Section 44, paragraph 1, item 6 of this Law shall be performed on completion of appropriate judicial proceedings on the basis of an enforceable court decision, whereas the goods referred to in Section 45 after the completion of the administrative procedure.
32. Pursuant to Section 53 paragraph 1 and 2 a monetary fine can be imposed on the person/an entity which performs activities contrary to the provisions of Section 16.
2. Rulebook on Records of Trade in Goods and Services (Pravilnik o evidenciji prometa robe i usluga, published in Official Gazette of Republic of Serbia, no. 45/96, 48/96, 9/97 and 6/99)
33. Pursuant to Section 1, paragraph 2 and 3 companies and entrepreneurs, which perform trade in goods and services, make records on received, served and delivered goods and services in the KEPU book (Knjiga evidencije prometa roba i usluga - The book/accounting records of trade of goods and services), and that the records are kept for every business premises or the place where sale is undertaken.
34. Pursuant to the Section 5 (1) and (2) business changes concerning trade in goods and services shall be registered in the KEPU book one day after the undertaken action at latest.
35. Pursuant to Section 7 paragraph 1 the KEPU book shall be updated in timely and accurate manner, in a way which does not allow for deletion of the data already registered.
36. Pursuant to the Section 11 items 1, 2 and 3 every company and entrepreneur must conclude the KEPU book in the end of every year. The closing balance presents the value of goods which is being transmitted as the initial state in the next year. Conclusion of the KEPU is being made on the last page of the latest entry for the current business year, and the KEPU book is being signed by the signature of the responsible person and with official stamp.
COMPLAINTS
The applicant complains that the Inspectorate breached its right to a fair trial, as guaranteed by Article 6 § 1 of the Convention. The applicant further complains, under Article 1 of Protocol No. 1, about the lawfulness of seizure and sale of its goods.
QUESTIONS TO THE PARTIES
1. Has there been a violation of Article 6 of the Convention? In particular, did the applicant have fair proceedings before an independent and impartial tribunal established by law, regard being had in particular to the fact that in the separate proceedings, concerning the same factual and legal context, the Constitutional Court found a violation of the applicant’s respective right and the Government compensated unlawful seizure of the goods?
2. Has there been a violation of Article 1 of Protocol No. 1 to the Convention? In particular, did the seizure of the applicant’s goods strike a fair balance between the demands of the general interest and the interests of the applicant personally, regard being had in particular to the severity of this sanction and the fact that relevant laws provided some other types of fine?
3. Was the sale of the applicant’s goods lawful?
4. Did the applicant exhaust all available legal remedies at the domestic level in respect of the sale of seized goods? In particular, did the applicant request any compensation, either directly from the state or through separate civil proceedings, for the sold goods?
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