Communicated on 18 October 2017
FIFTH SECTION
Applications nos. 64623/12 and 64819/12
Nugzar KHUTSISHVILI and LLC KARTU MSHENEBELI against Georgia
and GEORGIAN DREAM against Georgia
lodged on 26 September 2012 and 28 September 2012 respectively
STATEMENT OF FACTS
The applicants are a Georgian national who resides currently in Georgia, a company registered in Georgia and another organisation based in that State. They are represented before the Court by Ms A. Kakhniauri, a lawyer practising in Tbilisi. The details of their applications are set out in the Appendix.
A. The circumstances of the cases
The facts of the cases, as submitted by the applicants, may be summarised as follows.
On 9 February 2012 S. Khutsishvili (“the first applicant”), who at that time was working as a deputy director of LLC Kartu Mshenebeli (“the applicant company”) and who at the same time was employed by several other companies, made a donation/contribution to a then non-commercial entity, Georgian Dream national movement (“the applicant organisation”), in the amount of 20,000 Georgian laris (GEL), approximately 92,000 euros (EUR) at the material time. By a decision of 27 February 2012 the Financial Monitoring of Political Parties Service of the State Audit Office of Georgia found the applicants liable for administrative offences under the Political Associations of Citizens Act. The first applicant and the applicant company were found liable for having accepted financial and material contributions from a legal entity and of having made financial or material contributions by a natural person or a legal entity in favour of a party, in violation of the law. The applicant organisation was found liable for having accepted financial and material contributions from a legal entity and for refusing to transfer back the contributions to the contributors. The applicants were issued fines of GEL 200,000 each.
The applicants challenged the above decisions in a court. By decisions of 12 March 2012 and 15 March 2012 the Tbilisi City Court found the applicants guilty as charged.
The court stated in its decisions that it was unlawful to receive financial and material contributions from legal entities and to make a contribution through another person or to otherwise circumvents the restrictions prescribed in law. The restriction also applied to entities with declared political goals and purposes. In the instant case, the court stated that the applicant organisation had publicly declared its political goals and thus its activities fell within the regulation of the Political Associations of Citizens Act. That Act had been violated by all the applicants for the following reasons: according to the case file, the first applicant had been employed by the applicant company for several years, during which time he had never received a bonus. His annual salary in the applicant company had amounted to GEL 12,000. It was only on 6 February 2012 that the first applicant had received a bonus of GEL 50,000 from the applicant company. The court stated that the applicants had failed to provide any proof of the first applicant’s having performed any kind of work that would have justified receiving a bonus. For this reason the court held that the bonus had been disproportionate to the work done by the first applicant and to his salary. In addition, the period between receiving the bonus and transferring the contribution to the applicant organisation’s account had been so short that it had undoubtedly proved that the purpose of giving the bonus to the first applicant had been to make a contribution in favour of the applicant organisation. The court thus decided that in view of the fact that the applicant company as a legal entity had not been allowed to make a contribution, it had used a natural person – the first applicant – to make an unlawful contribution in favour of the applicant organisation, a fact which had also been known to the latter.
The applicants appealed. By decisions of 27 March 2012 and 2 April 2012 the Tbilisi Court of Appeal dismissed the applicants’ appeals and upheld the decisions of the Tbilisi City Court in full.
B. Relevant domestic law and practice
Under section 26(1)(a1) of the Political Associations of Citizens Act, as in force at the material time, it was forbidden to receive financial or material contributions from legal entities, associations of legal entities or from any other type of organisational formation.
Under section 261(1)(g) the restrictions prescribed by the relevant chapter of the law also apply to an entity with declared political and electoral goals.
Pursuant to section 271(2) if a contribution is made in violation of the law, a party is required to return the contribution to the contributor. If the party fails to comply with the requirement, the contribution will be transferred to the State.
Under section 342(1) of the Act it is forbidden to accept or conceal financial and material contributions from a legal entity by a party. Financial and material donations received in violation of this requirement will be transferred to the State and the relevant party will be fined ten times the value of the contribution.
Pursuant to section 342(2) of the Act a natural person or a legal entity making a financial or material contribution in favour of a party in violation of the law will be fined ten times the value of the contribution.
COMPLAINT
The applicants complain under Article 1 of Protocol No. 1 that the imposition of fines was disproportionate and thus violated their right to the peaceful enjoyment of property.
QUESTIONS
1. Was the imposition of fines on the applicants in the present case 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 within the meaning of Article 1 of Protocol No. 1?
2. Did the fines impose an excessive individual burden on the applicants?
APPENDIX
N.
Application no.
Lodged on
Applicant name
place of residence
Represented by
1.
64623/12
26/09/2012
Nugzar Khutsishvili
Tbilisi
LLC Kartu Mshenebeli
Tbilisi
Ala Kakhniauri
2.
64819/12
28/09/2012
Georgian Dream
Tbilisi
Full & Egal Universal Law Academy