SECOND SECTION
Application no. 23001/08
Aleksandar MATIĆ and POLONIA DOO
against Serbia
lodged on 16 April 2008
STATEMENT OF FACTS
The first applicant, Mr Aleksandar Matić, is a Serbian national, who was born in 1961 and lives in Mladenovac.
The second applicant, Polonia DOO, is a limited liability company based in the same town.
The first applicant is the second applicant’s authorised representative (odgovorno lice), and is employed by the latter.
Both applicants are represented before the Court by Mr M. Grujičić, a lawyer practising in Belgrade.
A. The circumstances of the case
The facts of the case, as submitted by the applicants, may be summarised as follows.
1. The proceedings concerning the applicants
In 2005 the second applicant bought a cargo ship (teretni brod) outside of Serbia. This ship’s estimated worth was approximately 545,000 Euros (“EUR”).
In September 2005 the first applicant, acting on behalf of the second applicant, retained the services of a forwarding company (špediter), which company specialised in customs-related matters.
On 13 September 2005 the forwarding company filed a declaration with the customs authorities in Belgrade, supplementing it with the relevant documentation provided by the applicants.
On 7 November 2005 the Customs Office (carinarnica) in Belgrade, having, inter alia, heard several witnesses, established that the ship had been improperly classified (svrstan pod pogrešni tarifni stav), which classification, in turn, implied that a smaller amount of customs duty would be payable. The forwarding company and its authorised representative, as well as the applicants in the present case, were thus found guilty of a customs offence (cariski prekršaj) and fined in accordance with the relevant legislation (see at B.1 below). In particular, the first and the second applicants were ordered to pay 10,000 and 3,000,000 Serbian Dinars (“RSD”) respectively, whilst the forwarding company and its authorised representative were fined in the amount of RSD 3,000,000 and 10,000 in that order. The Customs Office noted that its own classification of the ship in question was based on the assessment of one of the two expert organisations which had submitted opposing opinions during the proceedings.
On 11 October 2006 the Ministry of Finance (Ministarstvo finansija) partly accepted the appeals filed by the four defendants, and in so doing amended the fines imposed at first instance. In particular, the first and second applicants were ordered to pay RSD 5,000 and RSD 2,000,000, (approximately EUR 60 and EUR 23,600 at that time), respectively, whilst the forwarding company and its authorised representative were fined less, i.e. RSD 500,000 and RSD 3,000, (approximately EUR 5,900 and EUR 35 at that time) respectively. The Ministry stated that the reason for this distinction was that the forwarding company had merely complied with the applicants’ alleged request for the improper classification of the ship in question. It did not, however, refer to any supporting evidence in this regard.
On 25 October 2006 the applicants lodged an appeal on points of law (zahtev za vanredno preispitivanje pravosnažnog rešenja), which appeal was supplemented on 8 December 2006, 31 January 2008 and 12 February 2008. Therein, the applicants maintained that: (a) their intent had not been to deceive the authorities; (b) the veracity of the documentation attached to the customs declaration had never been disputed; (c) although the Belgrade Customs Office had retained two expert organisations to classify the ship in question, it had accepted, without explanation, one opinion and ignored the other which had supported the classification submitted by the forwarding company; (d) they had had no expertise or experience to navigate their way through the complex customs proceedings, which was why they had hired the forwarding company to deal with this issue and why they could not have instructed the former on how to fill out the customs declaration; and (e) the impugned decisions of the customs authorities had been inconsistent with their decisions in other similar cases (see at A.3 below).
On 26 December 2007 the Supreme Court (Vrhovni sud) ruled on the applicants’ appeal on points of law. The first applicant’s claims were rejected as inadmissible (odbačeni), since the amount of the fine imposed in his case was below the statutory threshold of RSD 100,000, whilst the second applicant’s claims were considered on their merits and rejected (odbijeni). The Supreme Court endorsed, briefly, the reasoning contained in the impugned decisions issued by the Customs Office and the Ministry. It did not, however, substantively address any of the points raised by the applicants in their appeal on points of law. The applicants received the Supreme Court’s judgment on 10 March 2008.
2. The legislation applied in the applicants’ case
The above-described proceedings were conducted on the basis of the Minor Offences Act 1989 as amended in 2004 (see at B.2, B.3 and C below), as well as the Customs Act 2003.
3. Other relevant facts
Between 25 September 2006 and 12 February 2010 the Ministry of Finance and the Supreme Court, applying, inter alia, Article 340 of the Customs Act, issued numerous decisions in respect of situations very similar to that of the applicants. Specifically, they noted that it was the responsibility of the importer to provide accurate documentation to the forwarding company and the latter’s duty to properly classify the goods in the customs declaration. Further, the importer’s good faith should be assessed, inter alia, on the basis of the complexity of the classification, as well as whether the customs authorities themselves have had to retain the services of outside experts in order to have the goods properly classified. In these cases the importers were, ultimately, either acquitted or formally cautioned (opomenuti) without being fined (see, for example, rešenja Ministarstva finansija od 25. septembra 2006. i 21. januara 2007, Pžc nos. 1349/05 and 667/07; as well as presude Vrhovnog suda od 22. novembra 2007. i 12. februara 2010, Upr nos. 532/07 and 2/10).
B. Relevant domestic law
1. The Customs Act 2003 (Carinski zakon, published in the Official Gazette of the Republic of Serbia – OG RS – nos. 73/03, 61/05, 85/05, 62/06 and 63/06)
Article 340 provides, inter alia, that a company, as well as its authorised representative employed therewith (odgovorno lice), shall be liable for failing to provide accurate information upon submission of a customs declaration, and shall be fined therefor.
2. The Minor Offences Act 1989 (Zakon o prekršajima, published in OG RS nos. 44/89, 21/90, 11/92, 20/93, 53/93, 67/93, 28/94, 16/97, 37/97, 36/98, 44/98 and 65/01)
Article 41 § 1 provides, inter alia, that a defendant may be formally cautioned, rather than fined, where there are serious extenuating circumstances.
Article 84 identifies, inter alia, the administrative authorities entrusted with conducting customs-related proceedings.
Article 35 § 1 provides that should a natural person (fizičko lice), fail to pay the fine imposed, it shall be converted into a prison term on the basis that one day in prison shall be worth RSD 500, but that the imprisonment may nor exceed a period of thirty days in all.
Article 36 § 2 provides that should a corporate entity fail to pay the fine imposed, it shall be collected “forcibly” (naplatiće se prinudnim putem).
Article 272 provides, inter alia, that a natural person, as well as an authorised representative of a corporate entity employed therewith (odgovorno lice u pravnom licu), shall be entitled to file an appeal on points of law if they have been fined in the amount of RSD 100,000 or more.
In accordance with Article 277, the Supreme Court shall, should it accept an appeal on points of law lodged by one of the parties concerned, have the power to overturn and/or amend the impugned decision or quash it and order the re-examination of the issue before the competent administrative authorities.
3. The Amendments to the Minor Offences Act 1989 adopted in 2004 (Zakon o izmenama i dopunama Zakona o prekršajima, published in OG RS nos. 55/04)
Article 17 of the Amendments Act adopted in 2004 amended Article 84 of the Minor Offences Act 1989, providing for a new organisation, at first and second instance, of the administrative authorities competent to conduct customs-related proceedings.
4. The Minor Offences Act 2005 (Zakon o prekršajima, published in OG RS no. 101/05)
On 1 January 2007 this Act repealed the Minor Offences Act 1989, as amended in 2004.
Article 306 of the Minor Offences Act 2005 provides that it shall be applicable to all pending cases where no second instance decision has been rendered on the merits by 1 January 2007. By implication, as regards all other pending cases, the Minor Offences Act 1989, as amended in 2004, shall remain applicable until their very conclusion.
C. The reservation to the Convention
The reservation deposited by Serbia upon ratification of the Convention reads as follows:
“While affirming its willingness fully to guarantee the rights enshrined in Articles 5 and 6 of the Convention, Serbia and Montenegro declares that the provisions of Article 5, paragraph 1[.c] and Article 6, paragraphs 1 and 3, shall be without prejudice to the application of Articles 75 to 321 of the Law on Minor Offences of the Republic of Serbia (Službeni glasnik Socijalisticke Republike Srbije, No. 44/89; Službeni glasnik Republike Srbije, Nos. 21/90, 11/92, 6/93, 20/93, 53/93, 67/93, 28/94, 16/97, 37/97, 36/98, 44/98, 65/2001) that regulate proceedings before magistrates’ courts.”
“The relevant provisions of the laws referred to in this reservation regulate the following matters:
- proceedings before the magistrates’ courts, including rights of the accused, rules of evidence and legal remedies (Articles 75 to 89 and 118 to 321 of the Law on Minor Offences of the Republic of Serbia);
- establishment and organization of the magistrates’ courts (Articles 89a to 115 of the Law on Minor Offences of the Republic of Serbia); and
- measures for securing the presence of the accused (Articles 183 to 192 of the Law on Minor Offences of the Republic of Serbia).”
This reservation was withdrawn by the Government on 10 May 2011, and registered at the Secretariat General of the Council of Europe on 11 May 2011.
COMPLAINTS
The applicants refer to Articles 6 § 1, 6 § 3 (d) and 14 of the Convention, as well as Article 1 of Protocol No. 1. In substance, however, they complain about: (a) their inability to question a certain witness at first instance; (b) the fairness and the arbitrary outcome of the proceedings brought against them; and (c) the adjudication of their case in a manner wholly inconsistent with the settled administrative/judicial practice at the relevant time.
QUESTIONS
1. Are the second applicant’s complaints under Article 6 § 1 compatible with the provisions of the Convention ratione materiae, given the content of the Government’s reservation made in respect of this provision (see at C of the attached draft)?
2. Are Articles 6 § 1 or 7 of the Convention, or Article 1 of Protocol No. 1, applicable to the facts of which the second applicant complains? Specifically, do they concern: (i) the “determination of ... [its] ... civil rights and obligations or of any criminal charge against ... [it] ...”, within the meaning of Article 6 § 1 of the Convention; (ii) a “criminal offence” or “penalty”, for the purposes of Article 7 of the Convention; and (iii) “possessions”, as understood in the context of Article 1 of Protocol No. 1?
3. Did the second applicant have a fair hearing in the determination of its civil rights and obligations or of any criminal charge against it, in accordance with Article 6 § 1 of the Convention? In particular, did the Supreme Court’s decision of 26 December 2007 contain sufficient reasons, as regards: (i) the relationship between the conviction, on the one hand, and the veracity of the documentation attached to the customs declaration, which had never been disputed, on the other; (ii) the Belgrade Customs Office’s decision to accept one expert opinion and ignore the other which had supported the classification submitted by the forwarding company; and (iii) the second applicant’s claim that the impugned decisions of the customs authorities had been inconsistent with their decisions in other similar cases?
4. Has there been a violation of Articles 6 § 1 or 7 of the Convention or Article 1 of Protocol No. 1 in the light of the second applicant’s allegation that its case was adjudicated in a manner wholly inconsistent with the settled administrative/judicial practice at the relevant time. Specifically, was the principle of legal certainty implicit in Article 6 § 1 of the Convention complied with? Further, can the Supreme Court’s decision of 26 December 2007 be considered, in this context, as a “lawful” (i.e. foreseeable) interference with the second applicant’s right to the peaceful enjoyment of its possessions? Finally, was the “criminal offence” of which the second applicant was convicted and/or the “penalty” imposed clearly defined (i.e. foreseeable) by the relevant domestic legislation and practice, as required under Article 7 of the Convention (see Article 340 of the Customs Act 2003 and the domestic jurisprudence summarised at A.3 of the attached draft)?
The Government are invited to clarify and document as to whether the Serbian administrative and/or judicial authorities in question have, formally and/or effectively, fully harmonised their approach in the determination of cases such as the applicants’ and, if so, as of what date exactly.
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