The inability to examine in the second instance the imposition of a disproportionate customs fine, which was characterized like a criminal sanction, violated the ECHR
JUDGMENT
Saquetti Iglesias v. Spain 30.06.2020 (app. no. 50514/13)
SUMMARY
Undeclared transfer of 150,000 euros. Customs control and imposition of a huge fine, equal to the amount transferred. Criminal nature of the fine.
Right to dual degree of jurisdiction in criminal matters. Impossibility of examination in a second instance jurisdiction, a heavy customs fine imposed without taking into account its proportionality. The ECtHR held that, according to Engel, the fine imposed on the applicant was “criminal” in nature.
During a customs check on leaving the Spanish territory, the applicant was found to be carrying an undisclosed amount of money. The competent authority imposed a fine of 153,800 euros, almost equivalent to the amount transferred. He then appealed to the Supreme Court, which dismissed it as a court of first instance. The ruling said no appeal could be lodged with the Supreme Court due to a recent amendment to the law, which had raised the minimum amount for appeals from 150,000 to 600,000 euros. The applicant, complaining of the immediate application of that law in his case, brought a constitutional action before the Constitutional Court. His action was dismissed on the ground that the applicant had not provided an adequate statement of reasons for its ‘special constitutional significance’.
As regards, in particular, constitutional appeals to the Constitutional Court, its Rules of Procedure limit the latter’s powers to assess whether the applicant’s rights or freedoms have been violated. The Constitutional Court itself has emphasized in its case-law that a constitutional appeal cannot be equated with an appeal.
However, the ECtHR held that the application of the contested restrictions to the applicant, who could not have a second instance of jurisdiction in a criminal case, had violated the very essence of the right to a dual degree of jurisdiction in criminal matters (Article 2 of the 7th Protocol), exceeding the margin of appreciation of the state.
Violation of the right to a double degree of jurisdiction in matters of a criminal nature.
PROVISION
Artice 2 of the 7th Protocol
PRINCIPAL FACTS
The applicant, Martin Saquetti Iglesias, is a Spanish national who was born in 1948. He lives
alternately in Madrid (Spain) and Buenos Aires (Argentina).
Mr Saquetti Iglesias complained that the higher courts had refused to review an administrative
decision penalising him for failing to declare a sum of money while going through customs at
Madrid-Barajas airport.
In March 2011 the customs and excise department checked Mr Saquetti Iglesias’s luggage before
boarding a flight from Spain to Buenos Aires. They discovered a sum of 154,800 euros (EUR), all but
EUR 1,000 of which they confiscated.
In August 2011 the Directorate General of Treasury and Financial Policy of the Ministry of the
Economy imposed a fine on Mr Saquetti Iglesias equivalent to the total amount confiscated.
In October 2011 Mr Saquetti Iglesias lodged an administrative appeal, which was dismissed by the
Madrid Higher Court of Justice. The Higher Court’s judgment stated that the case was not open to
appeal on points of law because of a recent amendment to the Administrative Court Act, increasing
the minimum amount for appeals on points of law from EUR 150,000 to EUR 600,000. Mr Saquetti
Iglesias lodged an amparo appeal, which was dismissed by the Constitutional Court on the grounds
that the applicant had not provided sufficient justification of the “particular constitutional
importance” of his appeal.
Relying on Article 2 of Protocol No. 7 (right of appeal in criminal matters) to the Convention, Mr
Saquetti Iglesias complained that he had been unable to obtain a review by a higher court of the
judgment of the Madrid Higher Court of Justice.
THE DECISION OF THE COURT…
Article 2 of the 7th Protocol
(1) Application: the sentence imposed on the applicant was of a ‘criminal’ nature according to the Engel criteria.
Classification in domestic law (non-decisive criterion).
Failure to comply with the customs declaration obligation set out in the Law on the Prevention of Money Laundering and the Financing of Terrorism constitutes an “administrative” offense.
Seriousness of the offense.
The relevant provision of this law was of general scope, covering any natural or legal person who crosses borders and carries out specific activities related to the movement of capital. The purpose of the fine was not to protect the state from loss of funds, but to prevent crime. This possibility was enough on its own. The present case differed on this point from previous cases such as Inocencio v Portugal (dec.) (43862/98, 11 January 2001, para. 26), which concerned a fine of only EUR 2,500 for unlicensed works, and Butler v United Kingdom (41661/98, 26 June 2002, para. 43), which concerned the imposition of an even stricter sanction, even though the authorities had carried out a proportionality check and had strong evidence that the applicant, who was registered of the police, had been involved in smuggling.
Severity of the sentence. The national law described the infringement committed by the applicant as “serious” and a fine of EUR 600 up to twice the amount at stake is envisaged.
(2) Exceptions to the right
The Court rejected all objections raised by the Government pursuant to Article 2. 7 of the 7th Protocol.
(a) Exception relating to “minor” offenses
(i) Interpretative Principles – According to the Explanatory Report to Protocol 7, when deciding whether an offense is of minor importance, an important criterion is whether or not the offense is punishable by imprisonment. In the present case, if the applicant had not paid the fine, that sentence could not have been replaced by such a custodial sentence. However, this aspect is not crucial – so other criteria must be taken into account.
It is clear that the laws of the Contracting States differ widely in the field of customs sanctions for non-declaration of money. Compliance with the principle of subsidiarity and the margin of appreciation that states must have in this area, leads the ECtHR to assess the criteria according to the specific circumstances of each case.
The measure in question had to meet a minimum level of seriousness, but it is up to the domestic authorities to consider 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 taken into account by the Court in determining whether an offense is minor, although not decisive.
This interpretation was in line with the general rules for the interpretation of the Treaties provided for in the Vienna Convention on the Law of Treaties.ii) Evaluation in the present case
ii) Evaluation in the present case
Seriousness. The applicant was fined EUR 153,800, which could have been even higher, up to twice that amount. The amount of the fine was equivalent to the total personal savings he managed to raise during his regular visits to Spain.
As it had not been established that the money in question came from money laundering practices, the severity of the penalty had to be commensurate with the gravity of the infringement found which had not occurred at this stage, ie for money laundering or tax evasion.
As regards the applicant ‘s conduct, it should be noted that he had complied with the obligation to declare money at each entry into Spanish territory.
Procedural guarantees. The decision of the Supreme Court of Madrid did not contain a statement of reasons for the proportionality of the measure in question, despite the need for such an analysis under the law in question. The decision did not state either the applicant ‘s personal circumstances or the documents or other evidence which it had provided. This was a requirement which the ECtHR had repeatedly emphasized in assessing customs sanctions from the point of view of Article 1 of the First Additional Protocol. In addition, according to the same law, in order for there to be a legal export of funds, the amount simply had to be declared, ie no prior approval was required, for the purposes of the relevant controls aimed at preventing money laundering and terrorist financing.
The objection of ‘minor’ offenses therefore did not apply in the present case.
(b) Exception in respect of disputes brought directly before the “Supreme Court”. In the field of administrative disputes, the Supreme Court is part of the hierarchy of ordinary courts and in which appeals can be appealed immediately after the decisions of the Supreme Court, if the claim exceeds the required limit (set by law at 600,000 euros). Therefore, there was no reason to consider the Supreme Court as the highest court that existed.
(3) Respect for the right: did the applicant have the right to appeal?
Body considered as a court of first instance. According to the Explanatory Report to Protocol No. 7 to the Convention, bodies “which are not courts within the meaning of Article 6 of the Convention may not be regarded as courts”. This applies to the body responsible for imposing the fine in the present case, namely the Directorate-General for Finance and Financial Policy, which reports directly to the Ministry of Economy. The applicant’s court of first instance was therefore the Higher Court.
Inadequacy of the role of the Constitutional Court in providing the required second instance of jurisdiction. According to the explanatory report, the Courts of Appeal or the courts of annulment can be considered to meet the requirements of safeguarding the “right of appeal”. However, it does not refer to the Constitutional Courts. In the light of the jurisdiction exercised by the Spanish Constitutional Court in the context of the constitutional action, as described below, the ECtHR held that it did not confer the required second instance of jurisdiction on the applicant.
Under Spanish law, the jurisdiction to assess matters of common law is exercised by courts that are part of the judiciary (including Courts of Appeal and annulment courts). As regards, in particular, constitutional actions, the Rules of Procedure of the Constitutional Court limit the powers of the latter to assess whether the applicant’s rights or freedoms have been violated and to protect or restore them. The Rules of Procedure stipulate that the Constitutional Court must refrain from any other assessment of the actions of the judiciary. The Constitutional Court itself has emphasized in its case-law that a constitutional appeal cannot be equated with an appeal.
Despite its compliance with the transitional provisions of the law in question, the application of the contested restrictions to the applicant violated the very substance of the right guaranteed by Article 2 of Protocol No. 7, beyond the State’s discretion.
It was therefore unanimously held that there had been a violation of Article 2 of Protocol No. 7 to the ECHR.
Just satisfaction: EUR 9,600 (non-pecuniary damage) and EUR 5,000 (costs and expenses)
