FIFTH SECTION
DECISION
AS TO THE ADMISSIBILITY OF
Application no. 74947/01
by Avel Vitalyevich TIMINSKIY
against Russia
The European Court of Human Rights (Fifth Section), sitting on 11 September 2007 as a Chamber composed of:
MrsS. Botoucharova, President,
MrK. Jungwiert,
MrR. Maruste,
MrA. Kovler,
MrJ. Borrego Borrego,
MrsR. Jaeger,
MrM. Villiger, judges,
and Mrs C. Westerdiek, Section Registrar,
Having regard to the above application lodged on 8 September 2001,
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 Avel Vitalyevich Timinskiy, is a Russian national who was born in 1969 and lives in Kurgan. He was represented before the Court by Mr I. Shirmanov, a lawyer practising in Nizhnevartovsk. The respondent Government were represented by Mr P. Laptev, Representative of the Russian Federation at the European Court of Human Rights
The facts of the case, as submitted by the parties, may be summarised as follows.
A. The circumstances of the case
The applicant is a commercial agent involved in the grain trade and is established as an independent entrepreneur.
On 15 May 1998 the applicant submitted to the tax authorities his official income declaration for 1997 whereby he declared a gross revenue of 6,490,869.92 roubles (RUR). After deductions, his taxable income was RUR 941,073.53, in respect of which the applicant was due to pay RUR 323,015.73 as income tax.
On 15 July 1998 the payment of the 1997 income tax was due. However the applicant did not have sufficient funds on his account and did not pay the full amount. The outstanding amount was RUR 319,412.23.
The Federal Service of the Tax Police charged him with tax evasion under Article 198 § 2 of the Criminal Code (tax evasion concerning a particularly large sum of money). It was stated that the applicant had committed the offence by “other means” as opposed to a failure to declare or a false declaration of income.
On 4 October 2000 the Kurgan Town Court examined the case and acquitted the applicant having found that the lack of funds on the applicant’s account on the payment day was partially caused by his contractors’ failure to transfer money under the contracts. The prosecutor’s office appealed against the acquittal.
On 21 November 2000 the Kurgan Regional Court, composed of three judges, quashed the acquittal having found that the circumstances established by the first instance court did not constitute a valid justification for a failure to comply with the statutory duty to pay tax. It stated that it was the applicant’s obligation to manage his assets so as to secure funds for meeting the forthcoming tax payments. The appeal court remitted the case to the town court for a fresh determination with the following instructions:
“When rehearing the case, the [town] court must examine the evidence comprehensively, fully and objectively. [It must also] determine correctly the question of [the applicant’s] guilt.”
On 22 January 2001 the town court re-examined the case and found that the applicant, having received commercial income, dissipated the whole amount including the part that he should have saved for paying tax. It also found that the applicant knew or should have known of his statutory duty to pay tax and was aware what amount he would be required to pay, and that he spent his funds for other purposes knowing that that might prevent him from complying with the tax duty. Having thus established his intentional failure to pay tax, the court found him guilty of tax evasion under Article 198 § 2 of the Criminal Code. The applicant was sentenced to two years’ imprisonment but was immediately discharged from serving the sentence under the 2000 Amnesty Act.
The applicant appealed against the conviction asserting, inter alia, that Article 198 was inappropriately vague because the phrase “by other means” was open to misinterpretation. He claimed that he did intend to pay tax but did not have money at the right time.
On 15 March 2001 the Kurgan Regional Court dismissed the applicant’s appeal and upheld the conviction. Two out of three judges in the court composition were the same as on 21 November 2000. According to the applicant, the appeal hearing lasted for ten minutes. The applicant was represented in the proceedings by legal counsel.
B. Relevant domestic law
Article 198 of the Criminal Code, in force at the material time, read, in so far as relevant, as follows:
Article 198. Criminal liability for tax or duty evasion by an individual
“Tax evasion committed through non-declaration of income ..., or by false declaration, or by other means ... shall be punishable...”
On 8 December 2003 the Law no. 162‑FZ “On Amendments and Addenda to the Criminal Code of the Russian Federation” excluded the phrase “or by other means” from Article 198 of the Code.
COMPLAINTS
The applicant complained under Articles 6 and 7 of the Convention that he was wrongly convicted under provisions of criminal law which were inapplicable in his case and were too vague.
Under Article 6 of the Convention the applicant complainted that the instructions given by the appeal court to the lower court when remitting the case disclosed that the courts were biased.
The applicant further complained under Article 6 of the Convention that the appeal court did not constitute an impartial tribunal because two of the three judges in the court composition of 21 November 2000 had already heard the case on 15 March 2001.
He finally complained under Article 6 of the Convention that the appeal hearing of 15 March 2001 was unreasonably short.
THE LAW
1. The applicant alleged that his conviction of tax evasion was based on wrong, vague and inapplicable legislation and that the proceedings were unfair. He invoked Articles 6 and 7 of the Convention which provide in so far as relevant as follows:
Article 6 (right to a fair hearing)
“In the determination of ... any criminal charge against him, everyone is entitled to a fair ... hearing ... by an independent and impartial tribunal established by law.”
Article 7 (no punishment without law)
“1. No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed.
2. This article shall not prejudice the trial and punishment of any person for any act or omission which, at the time when it was committed, was criminal according to the general principles of law recognised by civilised nations.”
The Government contested the applicant’s allegations. They claimed that the law applied in the applicant’s case was in force at the material time and was sufficiently clear. They contended that in the applicant’s case there had been an uncontested default in paying tax, that was a straightforward case of tax evasion, and there could be no other legal interpretation. The way the legal provision concerning tax evasion was formulated meant that once the intentional failure to pay tax was established it was immaterial by what way it had been committed, i.e. through a declaration fault or otherwise. In a similar way the Criminal Code did not seek to specify criminal liability for other offences, such as murder, whereby it did not give an exhaustive list by what means it may be committed – by poisoning, shooting or otherwise.
The Government further relied on the Ruling of the Constitutional Court no. 9‑P of 27 May 2003 concerning Article 199 of the Criminal Code “Criminal liability for tax or duty evasion by an organisation” which contained provisions similar to those previously found in Article 198. The Constitutional Court held that the provision establishing criminal liability for tax evasion “by other means” was compatible with the Constitution. In particular, its wording implied that only a failure to pay tax which was proven to be intentional could constitute an offence of evasion. Having found that, the Constitutional Court concluded that Article 199 contained no ambiguity which could leave this provision open to arbitrary application. The Government claimed that these conclusions were also valid in respect of Article 198 as it read at the material time.
The Government, finally, maintained that the subsequent amendment of Article 198 of the Criminal Code did not cast doubt on its validity during the time when it was in force. The fact that the law had changed did not by itself mean that the provision was unconstitutional, or incompatible with the Convention, or encroaching on the lawful rights and interests of the individuals.
The applicant maintained his complaints claiming that he had been unlawfully and arbitrarily convicted of a criminal offence which was not clearly provided for in the Criminal Code.
The Court reiterates that Article 7 of the Convention embodies, in general terms, the principle that only the law can define a crime and prescribe a penalty (nullum crimen, nulla poena sine lege) and prohibits in particular the retrospective application of the criminal law where it is to an accused’s disadvantage (see Kokkinakis v. Greece, judgment of 25 May 1993, Series A no. 260-A, p. 22, § 52). While it prohibits in particular extending the scope of existing offences to acts which previously were not criminal offences, it also lays down the principle that the criminal law must not be extensively construed to an accused’s detriment, for instance by analogy. It follows that offences and the relevant penalties must be clearly defined by law. This requirement is satisfied where the individual can know from the wording of the relevant provision and, if need be, with the assistance of the courts’ interpretation of it, what acts and omissions will make him criminally liable (see, among other authorities, Streletz, Kessler and Krenz v. Germany [GC], nos. 34044/96, 35532/97 and 44801/98, § 50, ECHR 2001-II, and Cantoni v. France, judgment of 15 November 1996, Reports of Judgments and Decisions 1996-V, p. 1627, § 29).
When speaking of “law” Article 7 alludes to the very same concept as that to which the Convention refers elsewhere when using that term, a concept which comprises statute law as well as case-law and implies qualitative requirements, including those of accessibility and foreseeability (see, among other authorities, Achour v. France [GC], no. 67335/01, §§ 41‑43, ECHR 2006-...).
In the instant case, the applicant admitted before the domestic court that he had failed to meet his tax obligations on the date provided for by law. In his defence he argued that it was not his direct intention to evade tax, but that it was an unfortunate consequence of him lacking funds, which was a circumstance outside his control. However, this reasoning was dismissed at the appeal stage in the domestic proceedings as unsubstantiated. The court established that the applicant had received income of a particular amount and was free to set aside the sum necessary for meeting his upcoming tax obligations. He was aware of the amount he was due to pay, of the deadline for the payment and of the consequences for failure to do so. However, he
went ahead with transactions that left him with insufficient assets. On the basis of these elements the court established that his failure to pay tax had been intentional and that therefore the evasion had taken place. Since the fact of non‑payment was not in dispute, and neither was the fact of his awareness, the question, by what means the applicant defaulted was no longer relevant to the question of liability.
The Court observes that legislative provisions are often expressed in general clauses that do not describe in detail every specific situation that they intend to address. In the present case, Article 198 contained an open‑ended list of means by which “evasion” could be committed, and it effectively read “Tax evasion committed by any means ... shall be punishable...”. The Court notes in this respect that this provision could have been clearer. However, it was possible to know from the wording of this provision that tax evasion would result in criminal liability regardless of the way by which it was committed. The substantive condition required to trigger this provision was therefore the existence of the “tax evasion”.
In the Court’s view, the application of Article 198 of the Criminal Code in the present case was rather straightforward. The courts were not required to construe the meaning of the phrase “by other means” in order to find the applicant guilty of evasion. It was sufficient to establish a “failure to pay tax that was proven to be intentional”, which the domestic courts did. This approach, moreover, was later endorsed by the Constitutional Court’s ruling of 27 May 2003, which demonstrated the consistency of the domestic practice in this respect. Moreover, the applicant’s defence in the domestic proceedings was that of shortage of funds which, he claimed, demonstrated the absence of any intention to evade tax. This argument was relevant to the question of whether or not there had been “tax evasion” and his guilt, and not to the scope of the sub-clause “by other means”. In view of the foregoing, the applicant may not claim to be a victim of the vagueness of law, or of its arbitrary application contrary to Article 7 of the Convention, as he alleged.
In so far as the applicant was dissatisfied with the outcome of the criminal proceedings against him, the Court observes that it is not called upon to examine alleged errors of fact and law committed by the domestic judicial authorities, provided that there is no indication of unfairness in the proceedings and provided the decisions reached cannot be considered arbitrary. On the basis of the materials submitted by the applicant, the Court notes that the applicant, personally and through his defence counsel, was able to present his arguments as he wished, and the judicial authorities gave them due consideration. Having regard to the facts as submitted by the parties, the Court has not found any reason to conclude that the applicant did not have the benefit of a fair hearing guaranteed by Article 6 of the Convention.
Accordingly, this part of the application is manifestly ill-founded and must be rejected pursuant to Article 35 §§ 3 and 4 of the Convention.
2. The applicant further claimed that he was convicted of a criminal offence by the court which did not constitute an impartial tribunal. He complained, in particular, that the instructions given by the Kurgan Regional Court on 21 November 2000 to the town court bound the latter to take a particular decision on the case.
The Government disagreed with the applicant’s interpretation of the court’s instructions. They pointed out that the phrase “to determine correctly the question of [the applicant’s] guilt” should be interpreted as “to determine whether the applicant was guilty or not” and not as a statement that the applicant had to be found guilty.
The Court reiterates that the existence of impartiality for the purposes of Article 6 § 1 must be determined according to a subjective test, that is on the basis of the personal conviction of a particular judge in a given case, and also according to an objective test, that is ascertaining whether the judge offered guarantees sufficient to exclude any legitimate doubt in this respect (see Fey v. Austria, judgment of 24 February 1993, Series A no. 255-A, p. 12, § 28).
The Court observes that the Kurgan Regional Court gave general instructions to the Kurgan Town Court how to remedy the procedural defects that were found in the preceding proceedings. It considers that the mere fact of instructions being given by the appeal court when remitting the case for a fresh examination is not as such incompatible with the principle of impartial tribunal. As to the particular phrase used in this case, the Court accepts the interpretation offered by the Government and considers that the instructions did not contain a message suggesting the applicant’s guilt, as he alleged.
It follows that these complaints are manifestly ill-founded within the meaning of Article 35 § 3, and must be rejected pursuant to Article 35 § 4 of the Convention.
3. Lastly, the applicant complained under Article 6 § 1 of the Convention about the composition of the appeal court and claimed that the proceedings before the appeal instance were too short.
In the light of all the material in its possession, and in so far as the matters complained of were within its competence, the Court considers that this part of the application does not disclose any appearance of a violation of any of the above Articles of the Convention. It follows that these complaints are inadmissible under Article 35 § 3 as being manifestly ill‑founded and must be rejected pursuant to Article 35 § 4 of the Convention.
For these reasons, the Court unanimously
Declares the application inadmissible.
Claudia WesterdiekSnejana Botoucharova
RegistrarPresident
Full & Egal Universal Law Academy