Communicated on 31 March 2016
SECOND SECTION
Application no. 77668/14
Ardian IMERI
against Croatia
lodged on 8 December 2014
STATEMENT OF FACTS
The applicant, Mr Ardian Imeri, is a Norwegian national of Albanian origin, who was born in 1980 and lives in Ski, Norway. He is represented before the Court by Mr S. Martić, a lawyer practising in Zagreb.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
On 13 March 2011, while crossing the border between Slovenia and Croatia, the applicant was caught by the customs authorities, carrying sums of 43,500 euros (EUR) and 730,000 Norwegian krones (NOK) which, contrary to the law, he had failed to declare. The money was immediately forfeited.
On 19 May 2011 the Financial Inspectorate of the Ministry of Finance (Ministarstvo financija, Financijski inspektorat, hereafter “the Ministry”) instituted administrative offence proceedings (prekršajni postupak) against the applicant for his failure to declare the above sums, an administrative offence as defined in section 40(1) of the Foreign Currency Act and section 74 of the Prevention of Money Laundering and Financing of Terrorism Act.
In his defence, the applicant explained that the money he had been carrying was his and his family’s earnings and savings, and was to be used to purchase a plot of land in Kosovo.
By a decision of 25 October 2011 the Ministry found the applicant guilty of the administrative offence in question and fined him 5,000 Croatian kunas (HRK). At the same time, the Ministry imposed a protective measure (zaštitna mjera), confiscating the EUR 43,500 and NOK 730,000 pursuant to section 69(2) of the Foreign Currency Act.
On 4 February 2012 the applicant lodged an appeal with the High Court for Administrative Offences (Visoki prekršajni sud Republike Hrvatske).
On 4 July 2012 that court quashed the first-instance decision and remitted the case.
In the resumed proceedings, by a decision of 5 September 2013 the Ministry found the applicant guilty of the administrative offence in question. He was fined HRK 5,000. At the same time, the Ministry imposed a protective measure, confiscating only part of the amount in issue, NOK 530,000. The Ministry returned EUR 43,500 and NOK 200,000 to the applicant, pursuant to section 69(4) of the Foreign Currency Act.
The Ministry held that the evidence presented did not corroborate the applicant’s defence. In particular, although he had indeed submitted a sale and purchase agreement for a plot of land in Kosovo, the amount of money he had been transferring across the border would not have been sufficient to buy the plot of land, which, according to the agreement, had a sale price of EUR 150,000. Also, it was unclear why the applicant had only had EUR 43,500 and the rest of the money in Norwegian kroner when the sale price had been determined in euros. The Ministry also held that the documents submitted by the applicant showed that, although he would have been able to accumulate some savings at home, because he and his family had been living and working in Norway for thirteen years, he would not have been able to save NOK 730,000, especially bearing in mind the very high living costs in Norway. On the other hand, the Ministry accepted the receipts from the foreign exchange bureau as sufficient evidence of the lawful origin of the EUR 43,500.
The relevant part of the Ministry’s decision reads:
“Given that the accused’s statements concerning the legitimate source and destination [of the currency] were not proved beyond doubt and that ... the accused’s defence was not accepted, the Ministry imposed a protective measure (zaštitna mjera), confiscating NOK 530,000 pursuant to section 69(2) of the Foreign Currency Act.
However, in view of the fact that the accused and his brother are on the management boards of [certain] companies, and that both of them, as well as the accused’s brother’s wife, have been working and receiving a salary in Norway for years, and that they concluded a preliminary agreement on the purchase of real estate, it would not be justified to confiscate the entire amount of disputed currency. [Therefore] the Ministry decides to apply section 69(4) [of the Foreign Currency Act] and return the NOK 200,000 and EUR 43,500 to the accused.”
By a decision of 4 December 2013 the High Court for Administrative Offences dismissed an appeal by the applicant and upheld the Ministry’s decision, endorsing the reasons given therein.
The applicant then lodged a constitutional complaint, alleging, inter alia, a violation of his constitutionally protected right of ownership. In particular, he argued that the imposition of the protective measure of confiscation had been disproportionate in the circumstances, and therefore contrary to Article 1 of Protocol No. 1 to the Convention. He referred to the Court’s case-law, in particular to the case of Gabrić v. Croatia (no. 9702/04, 5 February 2009).
By a decision of 17 June 2014 the Constitutional Court (Ustavni sud Republike Hrvatske) dismissed the applicant’s constitutional complaint, and on 7 July 2014 it served its decision on his representative. It held that, in comparison with the Gabrić case, the decisive difference was the fact that the applicant had not proved the lawful origin of the money.
B. Relevant domestic law
1. Foreign Currency Act
The relevant part of the Foreign Currency Act (Zakon o deviznom poslovanju, Official Gazette no. 96/03 with subsequent amendments), in force at the material time, read:
Movement of foreign or domestic currency in cash and cheques
Section 36(1)
“Foreign currency in cash and cheques may be freely brought into the Republic of Croatia, subject to a reporting obligation pursuant to section 40 of this Act.”
Prevention of money laundering and counterfeiting of foreign currency
Section 40(1)
“Residents and non-residents crossing the State border are required to declare to a customs official ... foreign or domestic currency in cash or cheques of the value prescribed by the legislation regulating the prevention of money laundering.”
Section 69
(1) A fine of HRK 5,000.00 to HRK 50,000.00 for an administrative offence shall be imposed on a domestic or foreign natural person ... who attempts to take or takes across the State border cash or cheques of the value prescribed by the legislation regulating the prevention of money laundering, without declaring them to a customs official.
(2) Cash and cheques which are the objects of the offence referred to in paragraph 1 of this section shall be confiscated for the benefit of the State budget.
...
(4) Exceptionally, in particularly justified situations where special mitigating circumstances exist, the authority adjudicating on the administrative offence may decide that the cash and cheques which are the objects of the administrative offence referred to in paragraph 1 of this section shall not be confiscated or shall be confiscated only in part.”
2. Prevention of Money Laundering and Financing of Terrorism Act
Section 74(1) of the Prevention of Money Laundering and Financing of Terrorism Act (Zakon o sprječavanju pranja novca i financiranja terorizma, Official Gazette no. 87/08 with subsequent amendments) reads:
“Customs [authorities]... shall immediately, or within three days of the transfer at the latest, inform the Office [for the Prevention of Money Laundering] of any declared transfer across the State border of cash or cheques in domestic or foreign currency of a value, in HRK equivalent, of EUR 10,000 or more...”
COMPLAINT
The applicant complains that the decision of the domestic authorities in the administrative offence proceedings to both fine him and confiscate NOK 530,000 from him for his failure to declare the sums of EUR 43,500 and NOK 730,000 at customs was excessive, and thus violated his right of property.
QUESTIONS TO THE PARTIES
Was the confiscation of NOK 530,000, for failing to declare the sums of EUR 43,500 and NOK 730,000 to the Croatian customs authorities, necessary to control the use of property in accordance with the general interest, within the meaning of Article 1 of Protocol No. 1 to the Convention? In particular, in the circumstances of the present case, did that measure strike the requisite fair balance between the demands of the general interest and the requirement to protect the applicant’s right of property, and did it impose a disproportionate and excessive burden on him, having particular regard to the severity of the sanction (see, for example, Gabrić v. Croatia, no. 9702/04, 5 February 2009)?
Full & Egal Universal Law Academy