FIFTH SECTION
DECISION
AS TO THE ADMISSIBILITY OF
Application no. 66058/01
by Konstantin Vladimirovich LOZHKIN
against Russia
The European Court of Human Rights (Fifth Section), sitting on
2 May 2007 as a Chamber composed of:
MrP. Lorenzen, President,
MrsS. Botoucharova,
MrK. Jungwiert,
MrV. Butkevych,
MrR. Maruste,
MrA. Kovler,
MrM. Villiger, judges,
and Mrs C. Westerdiek, Section Registrar,
Having regard to the above application lodged on 14 October 2000,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
THE FACTS
The applicant, Mr Konstantin Vladimirovich Lozhkin, is a Russian national who was born in 1971 and lives in the town of Kandalaksha in the Murmansk Region. He was represented before the Court by Mr A. Kovalev, a lawyer practising in Murmansk. The Russian Government (“the Government”) were represented by Mr P. Laptev, Representative of the Russian Federation at the European Court of Human Rights.
A. The circumstances of the case
The facts of the case, as submitted by the parties, may be summarised as follows.
1. Import of the applicant’s car from the Republic of Belarus into the Russian Federation
In 1998 the applicant decided to purchase a car in the Republic of Belarus. According to the applicant, he applied to the Kandalaksha Customs Office (Кандалакшская таможня, “the Customs Office”) for information concerning the applicable customs regulations and fees and was informed that the customs border between the two states had ceased to exist, customs restrictions had been abolished, and therefore the Russian customs authorities no longer collected duties in respect of motor vehicles imported from Belarus into Russia.
On 26 October 1998 the applicant purchased a second-hand German car in the Republic of Belarus.
On 2 November 1998 he brought the vehicle into Russia and passed through customs control in the Customs Office without being required to pay any duties. The inspector in charge stamped the invoice for the purchase of the car to indicate that the customs formalities had been accomplished and no customs clearance was needed.
On 16 January 1999 the State Road Traffic Inspectorate registered the applicant’s vehicle.
2. Administrative proceedings concerning the applicant’s alleged failure to pay customs duties and other related taxes
On 27 October 1999 the Customs Office informed the applicant that he had failed to comply with clearance requirements when he imported his motor vehicle into Russia and had to present his car to the Customs Office before 30 November 1999 to obtain clearance.
By a letter of 30 November 1999 the Customs Office notified the applicant that he had failed to pay customs duties and other related taxes on his imported car totalling RUR 27,111.46 (approximately EUR 1,000) in time. In the same letter it required the applicant to pay a daily penalty (пеня) for the delay in the payment of the above sum starting from the date on which the vehicle had entered Russia. The penalty amounted to RUR 16,339.17 (approximately EUR 600) and continued to accrue. The sums were payable before 20 December 1999.
The applicant refused to comply with these decisions and challenged the above order before the director of the Customs Office.
By a letter of 16 December 1999 one of the deputy directors of the Customs Office informed the applicant that an investigation had been started into the alleged failure of an unidentified person to make a proper declaration in respect of a motor vehicle that had been imported from Belarus into Russia and registered by the State Road Traffic Inspectorate on 16 January 1999. The investigation established that the car in question had been purchased by the applicant, who had then applied for its registration. The applicant had allegedly repeatedly been summoned as a witness but had failed to appear.
The letter further stated:
“... it is true that the papers on the car which you have imported contain checks by the Kandalaksha Customs Office – a stamp stating ‘customs control accomplished; customs clearance not required’, signed by a customs officer and sealed with his personal stamp. Yet the vehicle is not registered at the customs registry [and] the customs control has not, in fact, been performed. According to the directive issued by the State Customs Committee of the Russian Federation on 28 November 1996 ..., a customs control cannot be finalised unless there is proof of the transfer of customs duties and other taxes collected in Belarus to the federal budget of the Russian Federation. The customs officer sent no such request to the Belarusian authorities and, accordingly, such proof is missing.
The customs officer, who checked and stamped your documents did, therefore mislead you ... and will take responsibility for this. However, this does not absolve you of the obligation to clear duly the motor vehicle through customs in the proper manner.
As you failed to produce the vehicle within the fixed time-limit and did not perform the customs clearance in the Kandalaksha Customs Office in compliance with [our] orders of 19 October 1999 and 27 October 1999, administrative proceedings for breach of customs regulations have been brought against you ...”
The applicant stated that he had never received the order of 19 October 1999 and that he had attended the Customs Office once, on receipt of the first summons.
3. First set of court proceedings
The applicant challenged the decision of the Kandalaksha Customs Office concerning the imposition of the duties and a fine in court.
On 14 February 2000 the Kandalaksha Town Court of the Murmansk Region (Кандалакшский городской суд Мурманской области) gave a judgment in the applicant’s favour.
It found that the applicant’s vehicle pertained to a category of goods originating in a third country that had been duly released into free circulation on the territory of Belarus. It then had regard to Decree no. 525 issued by the President of Russia on 25 May 1995, the resolution of the Government of Russia no. 583 of 23 June 1995, Directive no. 01-14/1310 issued by the State Customs Committee on 28 November 1996 and other relevant instruments (see the “Relevant domestic law”) and held that they had abolished customs control and customs clearance in respect of the said category of goods.
The court rejected the defendant’s argument that the requirement to pay the customs duties in the present case was justified by the fact that the implementation of the customs union between the two states was not yet complete. With respect to the defendant’s argument that the applicant had failed to present the necessary documents when passing through customs control as prescribed by the directive of the State Customs Committee of
28 November 1996, the court noted that the directive in question was unclear and the Kandalaksha Customs Office had misconstrued it.
The court concluded that the applicant was, therefore, exempt from the customs duties and other fees and that the customs authorities’ order was unlawful.
On 6 September 2000, on an appeal by the Kandalaksha Customs Office, the Murmansk Regional Court quashed the above judgment and substituted its own decision.
It agreed with the finding of the court below that the applicant’s car had originated in a third country and been duly released in Belarus, and the applicant had properly declared it and passed through customs control in Russia. However, the Regional Court considered that the Town Court had erred in law in holding that the category of goods to which the applicant’s car belonged was unconditionally exempt from customs clearance. It referred to the incomplete implementation of the customs union and the applicant’s failure to produce the documents required by the aforementioned directive of the State Customs Committee and ruled that the claims of the Kandalaksha Customs Office were well-founded. It accordingly dismissed the applicant’s complaint.
4. Second set of court proceedings
On an unspecified date the Customs Office brought a court action against the applicant for the recovery of the amounts due in respect of the customs duties and surcharges.
On 25 December 2000 the Town Court granted its claims in part. It noted that the court decision of 6 September 2000 was res judicata in the applicant’s case and therefore the applicant was under an obligation to pay the customs duties amounting to RUR 26,724.29 (approximately EUR 760). However, it absolved the applicant of payment of the surcharges after noting that his failure to pay the customs duties in time had been due to the general uncertainty and ambiguity of the regulations governing the import of goods from Belarus to Russia.
On 11 April 2001 the Regional Court upheld the first instance judgment on appeal.
According to the applicant, he had to pay the sum due by instalments because of its size. He discharged his obligation in full in November 2003.
B. Relevant international and domestic law
1. The Agreement on the Customs Union between the Republic of Belarus and Russia of 6 January 1995 (“the Agreement”)
Article 4 § 1 of the Agreement provides, as follows:
“Import customs duties, taxes and contributions of equivalent value on goods originating in a third country shall be levied in the budget of the High Contracting Party which is the country where such goods are consigned.”
Article 6 § 2 of the Agreement provides, so far as relevant, as follows:
“The Contracting Parties ... shall abolish customs control at the border between them ... provided that reliable customs control is exercised at their external borders”.
2. Domestic law
In line with the Agreement, on 25 May 1995 the President of Russia issued decree no. 525 abolishing customs control at the border between Russia and Belarus.
On 23 June 1995 the Government of Russia adopted resolution no. 583 implementing the above decree. In particular, it ordered that the State Customs Committee to abolish customs control and customs clearance at the border between Russia and the Republic of Belarus in respect of, inter alia, goods originating from Belarus or that had been released into free circulation in Belarus.
On 28 November 1996 the State Customs Committee of Russia issued directive no. 01-14/1310 exempting goods originating in a third country and duly released into free circulation in the Republic of Belarus from customs duties in Russia. In order to obtain the exemption a document had to be produced proving that the import duties paid to the Belarusian customs authorities had been transferred into the budget of Russia. Failure to provide such proof would result in the imported goods of the said category being subject to customs clearance in Russia.
COMPLAINTS
The applicant complained that the imposition of customs duties and surcharges was unlawful. In particular, he submitted that the law should be unequivocal and its application should be predictable for those subject to it, so that they could comply with it. The applicant contended that he had been granted exemption from the duties once his documents had been stamped by the customs officer. Thus, he had a reasonable expectation that he was entitled to the exemption. In such circumstances the order to pay both the duties and the surcharges, which followed some time later, had not been foreseeable. The applicant submitted that the payments imposed an excessive burden on him. He invoked Article 6 of the Convention.
THE LAW
1. The applicant complained that the imposition of customs duties and a fine a year after he had imported his vehicle and had been granted an exemption had been unforeseeable and placed an excessive burden on him. This complaint falls to be examined under Article 1 of Protocol No. 1 to the Convention, which provides 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) The Government
The Government stated that under the relevant domestic legislation the applicant had been under an obligation to perform proper customs clearance of his imported motor vehicle, including the payment of customs duties. In the Government’s view, the stamp “customs control accomplished; no customs clearance required” on the applicant’s invoice for the purchase of the vehicle proved that the applicant’s car had been brought onto the territory of Russia, but not that the customs clearance had been completed. In this respect, the Government contended that the applicant had misinterpreted the terms of the national legislation and of the relevant agreements between Russia and Belarus and mistakenly considered that there was a common customs area between the two States.
They further pointed out that the relevant national legislation then in force had authorised the customs authorities to exercise, at any time, control over goods, including motor vehicles, where there was a reasonable suspicion of a breach of the customs regulations. Once the applicant’s failure to perform the customs clearance of his imported vehicle had been established, the authorities had notified him of his obligation to pay the duties. The Government also stated that since the applicant had failed in his obligation to pay the customs duties within the statutory time-limit of
15 days after the date of the import of his car onto the territory of Russia, the authorities had been justified in claiming the surcharges.
(b) The applicant
The applicant disagreed with the Government and reiterated his complaints. He argued that the fact that his imported vehicle had been registered by the State Road Traffic Inspectorate proved that the customs clearance had been completed. He also contested the Government’s statement regarding the absence of a customs union between Russian and Belarus as being incorrect. He further pointed to contradictions between the regulations on the matter issued by the Russian customs authorities and their Belarusian counterparts and, in particular, to their disagreement as to whether in a situation such as his the customs duties collected in Belarus should then be transferred to the budget of Russia. The applicant contended that in those circumstances he had had no realistic opportunity of complying with the directive of 28 November 1996 and of presenting proof of the transfer of the customs duties to the budget of the Russian Federation, as had been ordered by the Russian authorities. Finally, the applicant submitted that the unlawfulness of the surcharges had been confirmed by the domestic courts.
(c) The Court’s assessment
The Court does not consider it necessary to examine the parties’ arguments in their entirety, since the present application is in any event inadmissible for the following reasons.
The Court observes at the outset that the applicant imported his car and obtained an exemption from payment of the customs duties on 2 November 1998. A year later the authorities notified him that the decision granting him the exemption was erroneous, and could only have been granted if the applicant complied with the conditions set forth in the relevant directive of 28 November 1996, requiring him, in particular, to produce certain documents. The applicant complained that the authorities had invalidated the original decision, ordered him to pay the duties and imposed a heavy monetary penalty on him.
i. Customs duties
It has first to be decided whether the applicant had a substantive interest protected by Article 1 of Protocol No. 1. The Court recalls in this connection that, according to its established case-law, a conditional claim which lapses as a result of non-fulfilment of the condition cannot be considered as a “possession” within the meaning of Article 1 of Protocol No. 1 (see, among other authorities, Kopecký v. Slovakia [GC],
no. 44912/98, § 35, ECHR 2004-IX).
The Court notes in the present case that, when ordering the applicant to pay the customs duties, the national authorities referred to the directive of 28 November 1996, which laid down the conditions of eligibility for the exemption and was in force when the applicant imported his car. The applicant did not comply with these conditions when passing through customs. It is therefore clear that the decision granting him the exemption was manifestly erroneous.
Moreover, even assuming that the applicant was not aware of the directive in question at the time, he made no attempt to comply with the requisite conditions and produce the missing documents upon receipt of the notification from the customs authorities that the decision to exempt him from the payments was erroneous, nor did he produce them in the proceedings before the domestic courts.
Against this background, the Court is not satisfied that the applicant could have had a “legitimate expectation” of being exempted from the payment of the duties, or that the initial erroneous decision granting him such an exemption could have amounted to a “possession” within the meaning of Article 1 of Protocol No. 1.
The Court notes in addition that it cannot accept the applicant’s argument regarding the foreseeability of the impugned measure, since the directive of 28 November 1996 clearly established the conditions for the exemption and was accessible to the applicant on the date on which he imported his car. Overall, given that the original decision exempting the applicant from the customs payments was manifestly erroneous (see, for instance, The Synod College of the Evangelical Reformed Church of Lithuania v. Lithuania (dec.), no. 44548/98, 5 December 2002, in which the domestic courts erroneously granted property to the applicant and then rectified the mistake by taking it away), and the fact that the State enjoys a wide margin of appreciation in the field of taxes and other compulsory contributions, the Court considers that, in any event, the alleged interference with the applicant’s property rights was justified under Article 1 of Protocol No. 1.
Accordingly, this part of the application is manifestly ill-founded and should be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.
ii. Surcharges
In his original application the applicant complained that a heavy monetary penalty had been imposed on him for his alleged failure to pay the customs duties from which he had been initially exempted. However, in his observations in reply to the Government’s memorial the applicant indicated that in a judgment of 25 December 2000, which was upheld on 11 April 2001, the domestic courts had absolved him from payment of the surcharges.
In such circumstances, the applicant cannot claim to be a victim of the alleged violation of his property rights. This part of the application is therefore manifestly ill-founded and should be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.
2. The applicant referred to Article 6 of the Convention in connection with his complaints without further explanation.
In the absence of an appearance of any violation of the applicant’s rights secured by the aforementioned provision, this part of the application is manifestly ill-founded and should be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Claudia WesterdiekPeer Lorenzen
RegistrarPresident
Full & Egal Universal Law Academy