Information Note on the Court’s case-law 241
June 2020
Saquetti Iglesias v. Spain - 50514/13
Judgment 30.6.2020 [Section III]
Article 2 of Protocol No. 7
No appeal available against a heavy customs fine imposed without any consideration of proportionality: violation
Facts – During a customs check on leaving Spanish territory in March 2011, the applicant was discovered to be carrying a sum of money exceeding the limit for compulsory declaration (EUR 10,000). The competent authority therefore fined him EUR 153,800, almost equivalent to the full amount concerned. The applicant had explained that the money had originated in cash imports on his return from journeys to Argentina, which had been lawfully declared to a grand total of more than EUR 300,000 over a decade.
In October 2011 the applicant lodged an administrative appeal. In 2013 the Madrid Higher Court of Justice dismissed that appeal, pointing out that no appeal lay with such an administrative judgment as the relevant legislation had meanwhile been amended to raise the threshold on eligibility for an appeal on points of law depending on the amount at stake in the dispute (apart from proceedings for the protection of the fundamental rights): previously set at EUR 150,000, the threshold had been raised to EUR 600,000. Under a transitional provision, appeals still pending remained subject to the old procedural rules pending delivery of judgment by the relevant court.
Complaining, inter alia, of the immediate application of that law to his ongoing case, the applicant lodged an amparo appeal with the Constitutional Court, which the latter dismissed on the grounds that the applicant had failed adequately to justify the constitutional importance of his appeal.
Law – Article 2 of Protocol No. 7
(1) Applicability: had the penalty imposed on the applicant been "criminal" in nature? – The Court replied in the affirmative on the basis of the Engel criteria.
Classification in domestic law (non-decisive criterion) – Failure to comply with the obligation of customs declaration laid down in the Law on the prevention of money laundering and the financing of terrorism constituted an “administrative” offence.
Very nature of the offence – The relevant provision of the law in question was general in scope, covering any natural or legal person crossing a border and exercising the specified activities related to the movement of capital. The aim of the fine had not been to protect the State from loss of capital, but to deter and prevent crime. That consideration was possibly sufficient in itself. The present case differed on this point from such previous cases as Inocencio v. Portugal (dec.) (43862/98, 11 January 2001, Information Note 26), concerning a fine of only EUR 2,500 for unauthorised works, and Butler v. the United Kingdom (41661/98, 26 June 2002, Information Note 43), relating to a heavier sanction, although the authorities had conducted a proportionality check and held reasonably strong evidence that the applicant, who had a police record, had been involved in smuggling.
Severity of the penalty incurred – Domestic law classified the offence committed by the applicant as “serious” and provided for a fine of between EUR 600 and twice the sum at issue.
(2) Exceptions to the right guaranteed – The Court rejected all objections raised by the Government under Article 2 § 2 of Protocol No. 7.
(a) Exception concerning “minor” offences
(i) Principles of interpretation – According to the explanatory report to Protocol No. 7, when deciding whether an offence is of a minor character, an important criterion is the question of whether the offence is punishable by imprisonment or not. In the instant case, if the applicant had not paid the fine, that penalty could not have been replaced by such a custodial penalty. However, that aspect was not decisive - other criteria had to be taken into account.
Clearly the legislations of the Contracting States diverge widely in the sphere of customs sanctions for failure to declare sums of money. Compliance with the subsidiarity principle and the margin of appreciation which should be available to the States in this sphere leads the Court to consider that the relevance and weight which must be attached to each aspect should be assessed in accordance with the specific circumstances of each case.
The impugned measure had to attain a minimum level of severity, but it was for the domestic authorities to examine its proportionality, as well as the serious consequences, depending on the applicant’s personal situation. The existence of a custodial sentence was an important factor to be considered by the Court in determining whether or not an offence was minor, although it was not decisive.
That interpretation was in line with the general rules on the interpretation of treaties laid down in the Vienna Convention on the Law of Treaties.
(ii) Assessment in the instant case
Severity – The applicant was fined EUR 153,800, which total could have been even higher, up to a maximum of twice that sum. The amount of the fine was equivalent to the total personal savings which the applicant, who had no police record, had managed to amass during his regular visits to Spain.
As it had not been proved that the monies at issue had originated in practices linked to money laundering, the severity of the penalty had to correspond to the seriousness of the only infringement noted, that is to say the failure to declare the sum being transported – and not the gravity of the possible infringement, which had not been noted at that stage, of committing an offence such as money laundering or tax evasion.
As regards the applicant’s conduct, it should be noted that he had complied with the obligation to declare monies on each entry into Spanish territory.
Procedural safeguards – The judgment of the Madrid Higher Court of Justice comprised no analysis of the proportionality of the impugned measure, despite the necessity of such an analysis under the law in issue. Indeed, the judgment mentioned neither the applicant’s personal circumstances nor the documents or other evidence which he had provided. That was a requirement which the Court had had occasion to reiterate in assessing customs penalties from the angle of Article 1 of Protocol No. 1. Moreover, according to the same law, the legal exportation of capital, in principle, only had to be the subject of a declaration, that is to say that no prior authorisation was required, for the purposes of the relevant verifications geared to preventing money laundering and financing of terrorism.
The objection concerning “minor” offences was therefore not applicable in the present case.
(b) Exception concerning disputes brought directly before the “highest court” – In the sphere of administrative litigation, the Supreme Court was part of the hierarchy of ordinary courts with which appeals can be lodged immediately after the Higher Court of Justice, if the claim attained the requisite threshold (set by law at EUR 600,000). There was therefore no reason to consider the Higher Court of Justice as the highest court.
(3) Respect for the right secured: did the applicant enjoy a right of appeal?
Body considered as the court of first instance – According to the explanatory report to Protocol No. 7 to the Convention, bodies “which are not tribunals within the meaning of Article 6 of the Convention” cannot be regarded as “courts”. That applies to the body responsible for imposing the fine in the present case, that is to say the General Directorate of Treasury and Financial Policy, which comes directly under the Ministry of the Economy. Therefore, the first-instance court available to the applicant was the Higher Court of Justice.
Unsuitability of the role of the Constitutional Court for providing the requisite second level of jurisdiction – According to the explanatory report, courts of appeal or courts of cassation can be considered as meeting the requirements of ensuring the “right of appeal”. However, it does not mention Constitutional Courts. In the light of the competences exercised by the Spanish Constitutional Court in the framework of the amparo appeal, as described below, the Court took the view that it did not provide the requisite second level of jurisdiction.
In Spanish law, competence to assess matters of ordinary law is exercised by courts which are part of the judiciary (including courts of appeal and courts of cassation). As regards, in particular, amparo appeals against a judicial decision, the Organic Law on the Constitutional Court confines the latter’s powers to assessing whether the applicant’s rights or freedoms have been infringed and protecting or restoring those rights or freedoms; the Organic Law specifies that the Constitutional Court must refrain from any other consideration relating to the actions of the judicial organs. The Constitutional Court itself emphasised in its case-law that the amparo appeal could not be equated with an appeal on points of law.
Despite its conformity with the transitional provisions laid down in the Law at issue, the implementation in respect of the applicant of the limitations set out therein had infringed the very essence of the right secured under Article 2 of Protocol No. 7, overstepping the respondent State’s margin of appreciation.
Conclusion: violation (unanimously).
Article 41: EUR 9,600 in respect of non-pecuniary damage; claim for pecuniary damage dismissed.
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This summary by the Registry does not bind the Court.
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