Information Note on the Court’s case-law 202
December 2016
S.C. Fiercolect Impex S.R.L. v. Romania - 26429/07
Judgment 13.12.2016 [Section III]
Article 1 of Protocol No. 1
Article 1 para. 2 of Protocol No. 1
Control of the use of property
Confiscation of revenue for period in which company continued, without requisite permits, activity affecting environment: no violation
Facts – The applicant company was engaged in collecting and recycling scrap iron. In January 2005 it applied for the renewal of the requisite operating and environmental permits, which were due to expire on 7 Mach 2005. It was informed by the authorities that under new legislation (Order no. 876/2004) its activity was considered to have a significant impact on the environment and that it should therefore follow the authorisation procedure set out in that order. The company submitted additional documents as requested and a new environmental permit was issued on 24 March followed by a new operating permit on 14 April 2005. Throughout the period between the expiry of the operating permit on 7 March and its renewal on 14 April 2005 the applicant company continued to carry on its activity. The authorities subsequently imposed a fine equivalent to EUR 694 for operating without a permit and confiscated a sum equivalent to EUR 21,347 representing the market value of the scrap iron collected for recycling during the relevant period.
In the Convention proceedings, the applicant company complained under Article 1 of Protocol No. 1 that the sum confiscated in addition to the fine had been excessive and that the authorities had been responsible for its having to operate without a permit as they had failed to issue the necessary permits in time.
Law – Article 1 of Protocol No. 1: The interference with the applicant company’s right to peaceful enjoyment of its possessions was prescribed by law and pursued the legitimate aim of controlling the conditions under which activities with an environmental impact were carried out.
However, the confiscation of the unlawfully obtained revenue as a sanction in addition to the fine was not disproportionate, as it had not imposed an “individual and excessive burden” on the applicant company. So finding, the Court noted as follows.
(i) The applicant company had continued to carry out its activity without an environmental permit even though that activity was considered to have a significant impact on the environment. It could have asked the authorities what to do and should have suspended its activity until it had obtained the requisite permits and then brought proceedings to recover any damages, as the domestic courts had indicated.
(ii) The issue whether such conduct should be punished by a financial penalty with a deterrent effect such as a fine and the confiscation of the unlawfully obtained revenue came within the Contracting States’ wide margin of appreciation in the sphere of environmental protection.
(iii) The pecuniary penalties imposed were not excessive: allowing the company to keep the revenue obtained over the relevant period would encourage other commercial companies to carry out their activity without complying with the relevant legal provisions, in particular, those protecting the environment.
(iv) Unlike cases such as Ismayilov v. Russia (30352/03, 6 November 2008, Information Note 113) and Gabrić v. Croatia (9702/04, 5 February 2009) in which the cumulative effect of a fine and a confiscation measure had been found to be disproportionate, the legislation in the applicant company’s case did not provide for confiscation of an amount unrelated to the severity of the crime but had instead focused specifically on the profits earned during the period during which it had not held the relevant permits.
Conclusion: no violation (unanimously).
© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.
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