SECOND SECTION
Application no. 8144/07
Aleksandar ELISEEV and RUSKI ELITNI KLUB
against Serbia
lodged on 8 February 2007
STATEMENT OF FACTS
The first applicant, Mr Aleksandar Eliseev, is a Russian national who was born in 1953 and lives in Moscow. He was also a resident of Montenegro at the relevant time. The second applicant, the Russian Elite Club (“REC”), is an association (non-governmental organisation) registered in Montenegro (Kotor), its general aim being to develop economic and cultural relations between Russia and the then Serbia and Montenegro. The first applicant is one of the founders of the second applicant. They are represented before the Court by Mr V. Beljanski, a lawyer practising in Novi Sad.
A. The circumstances of the case
The facts of the case, as submitted by the applicants, may be summarised as follows.
On 19 March 2004 the applicant, apparently on his way from the Republic of Montenegro to Russia, intended to embark on the plane to Moscow at Belgrade Airport. He was accompanied by his wife, T.Z., who is the president of the R.E.C. The applicant was carrying EUR 9,400 in cash, which he had allegedly obtained from the second applicant and intended to use to open a bank account in Moscow on the latter’s behalf. In this regard, the R.E.C.’s Assembly had issued a decision, dated 2 February 2004, whereby it had decided to establish a branch office in Moscow, nominated its managers and allocated (assigned) 10,000 euros from its assets for the opening of a bank account in Russia for this purposes.
The applicant was stopped at the border by Serbian customs officers. There are two versions as to the exact course of the events of that day.
According to the applicant, when asked how much cash he was carrying, he replied that he and his wife were carrying around four to five thousand each. When he showed the amount of 9,400 euros, the customs officer seized it. On his requests to contact a lawyer and interpreter, he was told that he would have to miss the flight waiting for an interpreter to arrive. Upon his further request to get a declaration form to fill in the amount of cash they were carrying, as well as to be shown the applicable regulations, he was told that he could have found copies in a room near the check-in desks. However, on 26 March 2004 on his way back from Moscow via Belgrade Airport, he was told by a duty customs officer that such a declaration form did not exist. The customs officers drew up a report (zapisnik) which the applicant refused to sign because it incorrectly described the facts. The customs officers refused to listen to the applicant’s argument about the origin and distribution of the money or to look at the Assembly’s decision of 2 February 2004. Finally, the applicant received 4,000 euros back, while 5,400 euros remained seized.
According to the custom officers’ report on the spot and the subsequent findings of the competent authorities, the applicant reported only four to five thousand euros. A subsequent search revealed 9,400 euros. They allowed the applicant to keep the cash permitted to be transferred undeclared, e.g. 4,000 euros (2,000 per person) and temporarily seized the remaining amount. The report quoted the applicant, who allegedly said that he had brought the money from Montenegro, where he lived, and also possessed a declaration, at that moment unavailable. The custom officers also noted that the applicant fluently spoke and understood Serbian.
It would appear that on 27 March 2004 the applicant contacted the Ministry of Finance to reclaim (restore) the seized amount.
On 31 March 2004 the customs authorities instituted administrative offences proceedings (prekšajni postupak) against the applicant before the Foreign Currency Inspectorate of the Ministry of Finance (Ministarstvo finansija –Sektor za deviznu inspekciju). It would appear that the applicant was interviewed on the same day.
On 1 July 2004 the Inspectorate found the applicant guilty of having committed an administrative offence[1] and fined him with 5,000 dinars[2]. Had the fine not been paid within 15 days, it would have been replaced with imprisonment. At the same time, the Inspectorate imposed a protective measure of partial confiscation of the object of the offence (zaštitna mera delimičnog oduzimanja predmeta prekršaja) pursuant to Article 54 § 3 of the Foreign Currency Act. Having regard to the applicant’s partial declaration of cash, the Inspectorate decided to confiscate 4,500 euros and return to the applicant the remaining 900 euros of the initially seized amount.
On 6 August 2004 the first applicant appealed against this decision, stating, inter alia, that the Inspectorate had come to an erroneous factual and legal conclusion, leading to the ultimate confiscation of his money. He stated that he could not benefit from a lawyer or an interpreter at the airport and on 31 March 2004. Together with the appeal, he also submitted the R.E.C.’s decision of 2 February 2004.
On 2 February 2005 the Appellate Chamber of the Ministry of Finance (Ministarstvo finansija, Veće za drugostepeni prekršajni postupak) upheld the Inspectorate’s decision of 1 July 2004. In doing so, it held that the applicant had intended to transfer money undeclared and hidden and that he had failed to provide any declaration on the origin of the impugned money or on the entry of the money to the respondent State as required from non‑residents.
On 10 October 2005 the applicant filed an appeal on points of law (zahtev za vanredno preispitivanje pravosnažnog rešenja), restating his earlier arguments.
On 26 April 2006 the Supreme Court (Vrhovni sud Srbije) rejected the applicant’s appeal on points of law on its merits. This decision was served on the applicant on 29 August 2006.
It would appear that the part of the decision on the reimbursement of 900 euros has not been enforced to date.
B. Relevant domestic law
1. The Foreign Currency Act (Zakon o deviznom poslovanju, Official Gazette of the Federal Republic of Yugoslavia, nos. 23/02 and 34/02)
The relevant provision of the Foreign Currency Act can be summarised as follows.
Pursuant to Article 2, residents for the purposes of this Act are, inter alia, natural persons with citizenship (prebivalište) in the country, except natural persons with a temporary residence overseas longer that one year, as well as natural persons/aliens who reside in the country on the basis of a residence permit (dozvola boravka) or work permit longer than one year. Non‑residents are all those excluded from the term “residents”.
Article 34 § 1 provides that foreign currency and securities in foreign currency may be freely brought into the country.
Article 36 § 2 provides that the National Bank of Yugoslavia shall prescribe the conditions under which a non-resident may take abroad foreign cash and securities that he/she acquired in compliance with the law, as well as bring into the country foreign cash and securities.
Article 37 prescribes, inter alia, that all residents and non-residents crossing the State border are required to declare to the competent customs officer any cash or cheques in domestic or foreign currency exceeding the threshold prescribed by the statute regulating prevention of money laundering.
Pursuant to Article 43, the competent customs officer may temporarily seize cash and cheques in domestic or foreign currency taken across the State border, which exceed the threshold prescribed by the National Bank of Yugoslavia, while providing a declaration in that respect. Article 46 provides that the seized amount should be paid, within two days from the seizure, into the specified account of the Foreign Currency Inspectorate of the Ministry of Finance or deposited with the National Bank of Yugoslavia.
Article 54 §§ 1 and 3 provide that a fine of from 200 up to 21,000 dinars for an administrative offence shall be imposed on any resident or non-resident [...] who attempts to take or takes across the State border cash or cheques in contravention of the regulations adopted by the National Bank of Yugoslavia. In addition to the fine, such cash and cheques which are the objects of the administrative offence shall be confiscated by virtue of the decision on the administrative offence. They may be confiscated irrespective of the lack of ownership or the right to use them on the side of the offender. Only exceptionally, if motive or other circumstances imply that it is not justified to confiscate the entire amount, the authority deciding on the administrative offence may decide that the cash and cheques which are the objects of the administrative offence shall be confiscated only in part.
2. Decision of the National Bank of Yugoslavia (Odluka o uslovima i načinu ličnih i fizičkih prenosa sredstava plaćanja u inostranstvo i iz inostranstva, Official Gazette of the Federal Republic of Yugoslavia, no. 25/2002)
On the basis of Article 36 of the Foreign Currency Act (see above under B.1), the National Bank of Yugoslavia adopted this decision, whereby all residents and non-residents exporting cash had to declare to the customs the amount of cash exceeding 2,000 euros, regardless of the currency. The non‑residents had additionally to declare the origin of the money. If declared on entry or a certificate about withdrawal from the bank is produced, they can export higher amounts which correspond to the certified amount.
3. The Prevention of Money Laundering Act (Zakon o sprečavanju pranja novca, Official Gazette of the Federal Republic of Yugoslavia no. 53/2001)
Article 13 provides that the competent customs authorities shall inform the competent federal authority [Office for the Prevention of Money Laundering] of any transfer across the State border of cash [...] exceeding the value of 30,000 dinars,[3] at the latest within the period of three days of the transfer finding.
4. Administrative Offence Act 1989 (Zakon o prekršajima, Official Gazette of the Social Republic of Serbia, no. 44/89 and Official Gazette of the Republic of Serbia nos. 21/90, 11/92, 6/93, 20/93, 53/93, 67/93, 28/94, 16/97, 37/97, 36/98, 44/98, 62/01, 65/01 and 55/04)
Article 35 provides, inter alia, that if a natural person does not pay a pecuniary fine in due time, the court shall order a day of imprisonment for each 500 dinars of the fine, provided that the overall term of imprisonment may not exceed thirty days.
COMPLAINTS
The applicants complain under Article 1 of Protocol No. 1 that the confiscation of the cash, allegedly undeclared by the first applicant at the border, was not in the public interest and subject to the conditions provided for by law and by the general principles of international law. In this regard, they consider the relevant domestic law unforeseeable.
They further complain under Article 6 §§ 1 and 3(e) that the first applicant has been denied an oral hearing, as well as access to a lawyer and an interpreter during the search at the border and subsequently on 31 March 2004 while giving his first statement in the administrative offence proceedings. In this respect, they claim that regardless of its classification in domestic law, the relevant administrative offence was “criminal” by its nature.
Finally, the applicants complain under Article 13 that they had no effective domestic remedy at their disposal for their complaints under Article 1 of Protocol No. 1.
QUESTIONS TO THE PARTIES
1. Can the first applicant and/or the second applicant claim to be the victims of the alleged violation of Article 1 of Protocol No. 1, within the meaning of Article 34 (in particular as regards the issue of the ownership of the confiscated cash)?
2. Has there been a violation of Article 1 of Protocol No. 1 in respect of the first and/or the second applicant? In particular, was the confiscation of cash allegedly undeclared by the first applicant established by law (see Articles 2 and 43 of the Foreign Currency Act; see also Article 13 of the Prevention of Money Laundering Act) and did this interference strike a fair balance between the demands of the general interest and the interests of the applicants personally, regard being had in particular to the purpose and severity of the measures (see Grifhorst v. France (no. 28336/02, 26 February 2009), Gabrić v. Croatia (no. 9702/04, 5 February 2009) and Ismayilov v. Russia (no. 30352/03, 6 November 2008))?
The Government are requested to submit copies of any and all documents contained in the files of all authorities which dealt with the seizure and the ultimate confiscation of the amount in question, as well as all relevant legislation (laws and by-laws) in these matters.
3. Did the second applicant have at its disposal an effective domestic remedy for its complaint under Article 1 of Protocol No. 1, as required by Article 13 of the Convention?
The Government are also requested to submit the relevant practice of the administrative and judicial authorities when the owner of the seized/confiscated cash is a natural or legal person other than the person who failed to comply with the declaration requirement.
[1] Pursuant to Article 36 § 2 of the Foreign Currency Law and the Decision of the National Bank of Yugoslavia (see the “Relevant domestic law” under B.1 and B.2 respectively).
[2] Approximately 70 euros.
[3] On 19 March 2004 this sum amounted to 433 euros.
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