Imposition of a fine for illegal use of heating oil as fuel and imposition of a fine as an administrative offense with an increase of 100% of the tax due. Violation of the principle ne bis in idem.
JUDGMENT
Milošević v. Croatia 31.08.2021 (app. no. 12022/16)
SUMMARY
The right of every person not to be tried or punished twice for the same offense.
The applicant was fined for using a type of heating oil for a purpose not permitted by excise law, namely as fuel for his vehicle. Three days later, he was ordered to pay excise duty on the heating oil he had used with a 100% surcharge. He filed a complaint for his double conviction.
Strasbourg pointed out that the objective of Article 4 of Protocol No. 7 is to prevent the injustice of the person being prosecuted or punished twice for the same criminal behavior. However, it does not prevent legal systems from adopting parallel stages of legal action on infringements by different authorities and for different purposes in a predictable and proportionate manner, forming a coherent whole, so that the individual is not wronged. It defined three control criteria: i) the legal characterization of the offense: ii) the nature of the offense itself and iii 🙂 the degree of severity of the sentence.
The ECtHR noted that the main purpose of the fine imposed on the applicant was his punishment for a tax offense and the subsequent administrative (tax) procedure which forced him to pay excise duty on the fuel used, also with a 100% surcharge. to address the tax consequences of his unlawful conduct.
It concluded that the two proceedings had not been sufficiently linked to be considered as part of an integrated system of sanctions. It therefore considered that the applicant had been disproportionately burdened by the imposition of proceedings and sanctions, which did not constitute a coherent and proportionate body in his case. It found a violation of Article 4 of the 7th Protocol.
PROVISION
Article 4 of the 7th Additional Protocol
PRINCIPAL FACTS
The applicant, Milan Milošević, is a national of Bosnia and Herzegovina who was born in 1966 and
lives in Bosanski Brod (Bosnia and Herzegovina).
The case concerns the proceedings following heating oil – which was not legally meant for use as
vehicle fuel – being found in a lorry owned by the applicant in Vukovar (Croatia). Mr Milošević was
found guilty of a minor offence and fined 4,800 Croatian kunas (HRK) for illegal use of heating oil.
Later he was ordered to pay HRK 123,000 in respect of unpaid duties for the amount of heating oil
used.
Relying on Article 4 of Protocol No. 7 (right not to be tried or punished twice), the applicant
complains that he had been punished twice – via the minor offence conviction and the imposition of
excise duty – for the same set of facts.
THE DECISION OF THE COURT…
Article 4 of Protocol No. 7 to the Convention is understood as prohibiting the prosecution or trial of a second “offence” in so far as it arose from identical facts or facts which were substantially the same (see Sergey Zolotukhin v. Russia [GC], no. 14939/03, § 82, ECHR 2009; Marguš v. Croatia [GC], no. 4455/10, § 114, ECHR 2014; and A and B v. Norway [GC], nos. 24130/11 and 29758/11, § 108, 15 November 2016).
In cases raising an issue under Article 4 of Protocol No. 7, it should be determined whether the specific national measure complained of entails, in substance or in effect, double jeopardy to the detriment of the individual or whether, in contrast, it is the product of an integrated system enabling different aspects of the wrongdoing to be addressed in a foreseeable and proportionate manner forming a coherent whole, so that the individual concerned is not thereby subjected to injustice. The object of Article 4 of Protocol No. 7 is to prevent the injustice of a person’s being prosecuted or punished twice for the same criminalised conduct. It does not, however, outlaw legal systems which take an “integrated” approach to the social wrongdoing in question, in particular an approach involving parallel stages of legal response to the wrongdoing by different authorities and for different purposes.
Application of the principles in the present case
(i) Whether both sets of proceedings were criminal in nature
Turning to the present case, the Court has held in a number of previous cases against Croatia that minor-offence proceedings were to be considered “criminal” for the purposes of Article 4 of Protocol No. 7 (see Bajčić v. Croatia, no. 67334/13, § 27, 8 October 2020, with further references; see also, in the context of Article 6, Marčan v. Croatia, no. 40820/12, § 33, 10 July 2014). The Court sees no reason to hold otherwise in the present case.
As regards the subsequent administrative (tax) proceedings, the Court observes that the relevant provision of the Excise Duties Act was directed towards all citizens rather than only a group possessing a special status and that the applicant was ordered to pay excise duties in his capacity as owner of a motor vehicle . Moreover, the amount of the excise duties due was increased one hundred times on account of illegal use of heating oil as fuel . This must, in the Court’s view, be seen as a punishment to deter re-offending, recognised as a characteristic feature of criminal penalties (see Ezeh and Connors, cited above, §§ 102 and 105). Bearing in mind its previous case‑law on the matter (see Ruotsalainen v. Finland, no. 13079/03, §§ 42-47, 16 June 2009; and Rinas v. Finland, no. 17039/13, §§ 40-43, 27 January 2015), the Court concludes that the excise duties in the present case were imposed by a rule whose purpose was not merely compensatory but also deterrent and punitive, which is sufficient to establish the criminal nature of the proceedings at issue, within the autonomous meaning of Article 4 of Protocol No. 7.
(ii) Whether the offences were the same in nature (idem)
The notion of the “same offence” – the idem element of the ne bis in idem principle in Article 4 of Protocol No. 7 – was clarified in Sergey Zolotukhin. Following the approach adopted in that judgment, it is clear that the determination as to whether the offences in question were the same (idem) depends on a facts-based assessment, rather than, for example, a formal assessment consisting in comparing the “essential elements” of the offences. The prohibition in Article 4 of Protocol No. 7 to the Convention concerns the prosecution or trial of a second “offence” in so far as the latter arises from identical facts or facts which are substantially the same. In the Court’s view, statements of fact concerning both the offence for which the applicant has already been tried and the offence of which he or she stands accused are an appropriate starting-point for its determination of the issue whether the facts in both proceedings were identical or substantially the same. The Court’s inquiry should therefore focus on those facts which constitute a set of concrete factual circumstances involving the same defendant and inextricably linked together in time and space, the existence of which must be demonstrated in order to secure a conviction or institute criminal proceedings.
In the present case, there is no doubt that both the minor-offence proceedings and the subsequent administrative proceedings concerned an inspection of the fuel used in a truck owned by the applicant, which took place on 29 June October 2012, and the establishment of the fact that the fuel tank contained hearing oil. Consequently, the idem element of the ne bis in idem principle is present.
iii) Whether there was a duplication of proceedings (bis)
As the Grand Chamber explained in A and B v. Norway Article 4 of Protocol No. 7 does not preclude the conduct of dual proceedings, provided that certain conditions are fulfilled. In particular, for the Court to be satisfied that there is no duplication of trial or punishment (bis) as proscribed by Article 4 of Protocol No. 7, the respondent State must demonstrate convincingly that the dual proceedings in question were “sufficiently closely connected in substance and in time”. In other words, it must be shown that they were combined in an integrated manner so as to form a coherent whole. This implies not only that the purposes pursued and the means used to achieve them should in essence be complementary and linked in time, but also that the possible consequences of organising the legal treatment of the conduct concerned in such a manner should be proportionate and foreseeable for the persons affected . As regards the conditions to be satisfied in order for dual criminal and administrative proceedings to be regarded as sufficiently connected in substance and in time and thus compatible with the bis criterion in Article 4 of Protocol No. 7, the material factors for determining whether there was a sufficiently close connection in substance include:
– whether the different proceedings pursue complementary purposes and thus addressed, not only in abstracto but also in concreto, different aspects of the social misconduct involved;
– whether the duality of proceedings concerned was a foreseeable consequence, both in law and in practice, of the same impugned conduct (idem);
– whether the relevant sets of proceedings were conducted in such a manner as to avoid as far as possible any additional disadvantages resulting from duplication of proceedings and in particular duplication in the collection as well as the assessment of the evidence, notably through adequate interaction between the various competent authorities to ensure that the establishment of the facts in one set of proceedings is replicated in the other;
– and, above all, whether the sanction imposed in the proceedings which became final first was taken into account in those which became final last, so as to prevent the individual concerned from being in the end made to bear an excessive burden; this latter risk is least likely to be present where there is in place an offsetting mechanism designed to ensure that the overall amount of any penalties imposed is proportionate.
Combined proceedings will more likely meet the criteria of complementarity and coherence if the sanctions to be imposed in the proceedings not formally classified as “criminal” are specific for the conduct in question and thus differ from “the hard core of criminal law.
In the present case, following an inspection on 29 June 2012, the applicant was fined by way of a minor-offence penalty notice for having used a type of heating oil for a purpose which was not allowed by the Excise Duties Act. Three days later, he was ordered to pay excise duties on the heating oil he had used increased one hundred times.
Assessing the connection in substance between the minor-offence and the administrative (tax) proceedings in the present case, the Government maintained that the two sets of proceedings pursued complementary purposes. While the administrative (tax) proceedings had been aimed at punishing the perpetrator for attempted tax evasion, the Government claimed that the purpose of the minor-offence proceedings was primarily traffic safety, since the use of heating oil as fuel was generally unsafe and could damage the engine of the vehicle using it as fuel.
In this connection, the Court firstly notes that the provision on the basis of which the applicant had been issued the minor-offence fine forms part of the Excise Duties Act, which regulates the excise duties system of taxation of energy sources, and is classified in that Act under the title “excise duties minor-offence”. Secondly, the competent customs office made no mention of any traffic safety concerns when issuing the minor offences penalty notice . Most significantly, however, when amending the Excise Duties Act in 2015, while admitting that the existing legislative solution had been contrary to the ne bis in idem principle, the legislator removed the increase of one hundred times of the excise duties due, while maintaining the minor offence provision as the sole taxation-related penalty for the illegal use of heating oil as fuel. In the Court’s view, notwithstanding possible traffic safety considerations the use of heating oil as fuel may generally entail, the foregoing clearly indicates that the primary purpose of the fine imposed on the applicant in the minor-offence proceedings had been to punish him for a taxation-related minor-offence.
The Court further notes that the subsequent administrative (tax) proceedings against the applicant ordering him to pay excise duties on the fuel used were also conducted with the aim of addressing the taxation‑related consequence of his illegal behaviour. Moreover, as already observed by the Court , the amount the applicant was ordered to pay in those proceedings did not consist of a simple calculation of the excise duties due, but instead an increase of that amount by one hundred times because he had used heating oil contrary to section 74(2) of the Excise Duties Act. That amount thereby also pursued a punitive aim of punishing the applicant for attempted tax evasion. It can therefore not be said that the two sets of proceedings pursued merely complementary purposes in addressing different aspects of the failure to respect regulations on the use of heating oil (conversely Bajčić, cited above, § 41).
The Court notes that the two sets of proceedings complained of therefore sanctioned the same behaviour, defining and qualifying the illegal use of heating oil in the same manner and prescribing two separate sanctions which were not of a different nature (compare Nodet v. France, no. 47342/14, § 48, 6 June 2019). This is sufficient for the Court to conclude that the present case did not address different aspects of the wrongdoing in a manner forming a coherent whole, so that the individual concerned is not thereby subjected to injustice (see paragraph 35 above).
In addition, the Court observes that the fine imposed on the applicant in the minor-offence proceedings was not taken into account in subsequent administrative (tax) proceedings. Indeed, none of the four instances of administrative authorities and courts deciding the applicant’s case referred to the fine previously imposed on him by the Vukovar Customs Office, let alone lowered the amount of excise duties which the applicant was ultimately ordered to pay. Given the clear wording of section 76 of the Excise Duties Act as in force at the material time, it would appear that they did not even have leeway to reduce the amount prescribed therein.
The foregoing reinforces the Court’s conclusion that, notwithstanding their foreseeability, the two sets of proceedings had not been sufficiently linked in substance, as required under the Court’s case‑law, to be considered to form part of an integral scheme of sanctions under Croatian law, as in force at the material time, for illegal use of specially-taxed heating oil as fuel. On the contrary, having been punished twice for the same conduct, the applicant had in the Court’s view suffered disproportionate prejudice resulting from the duplication of proceedings and penalties, which did not form a coherent and proportionate whole in his case. In such circumstances, the Court finds it unnecessary to review whether the two sets of proceedings were sufficiently connected in time (see the relevant criteria set out in A and B v. Norway, cited at paragraph 35 above; see also Tsonyo Tsonev v. Bulgaria (no. 4), no. 35623/11, § 50, 6 April 2021). The Court is thus of the opinion, and agrees with the domestic authorities who subsequently amended the relevant provisions of the Excise Duties Act (see paragraph 17 above), that the duplication of the proceedings in the present case had been the direct consequence of the domestic law which, on the one hand, prescribed a fine for illegal use of special heating oil as fuel and, at the same time foresaw a hundred times increase of the tax surcharge that the perpetrator had to pay for such use.
There has accordingly been a violation of Article 4 of Protocol No. 7 to the Convention.
Just satisfaction:
non-pecuniary damage: 3,000 euros (EUR)
costs and expenses: EUR 685
