MATIĆ AND POLONIA DOO v. SERBIA
Inadmissible
Branko Lubarda;Ján Šikuta;Johannes Silvis;Josep Casadevall;Kristina Pardalos;Luis López Guerra
2. The applicants are Mr Aleksandar Matić (“the first applicant”) and Polonia DOO (“the second applicant”). 3. The first applicant is a Serbian national who was born in 1961 and lives in Mladenovac. He is also the second applicant’s authorised representative. The second applicant is a limited liability company based in Mladenovac. Both applicants were represented before the Court by Mr M. Grujičić, a lawyer practising in Belgrade. 4. The Serbian Government (“the Government”) were represented by their Agent, Mr S. Carić. 5. The facts of the case, as submitted by the parties, may be summarised as follows. 6. In 2005 the second applicant bought a cargo ship (teretni brod) outside of Serbia. This ship’s estimated worth was approximately 545,000 Euros (“EUR”). 7. In September 2005 the first applicant, acting on behalf of the second applicant, retained the services of a forwarding company (špediter), which company specialised in customs-related matters. 8. On 13 September 2005 the forwarding company filed a declaration with the customs authorities, supplementing it with the relevant documentation provided by the applicants. 9. On 7 November 2005 the Belgrade Customs Office (carinarnica), having, inter alia, heard a number of witnesses, established that the ship had been improperly classified (svrstan pod pogrešni tarifni stav), as a sea-going vessel, which classification, in turn, implied that no customs duty would be payable. The forwarding company and its authorised representative, as well as the applicants in the present case, were thus found guilty of a customs offence (cariski prekršaj) and fined in accordance with the relevant legislation (see paragraph 16 below). In particular, the first and the second applicants were ordered to pay 10,000 and 3,000,000 Serbian Dinars (“RSD”) respectively, whilst the forwarding company and its authorised representative were fined in the amount of RSD 3,000,000 and 10,000 in that order. The Customs Office noted that its own classification of the ship, as primarily a river-going vessel, was based on the assessment of one of the two expert organisations which had submitted opposing opinions during the proceedings. The Customs Office also referred to an attesting declaration, issued by the German authorities and provided by the applicants themselves, to the effect that the ship was “suitable for sailing on the Rhine, between Basel and the open sea”. In any event, the head of the Customs Office, at one point, recommended that the ship be classified as a river-going one, but the applicants refused to do so. 10. On 11 October 2006 the Ministry of Finance (Ministarstvo finansija) partly accepted the appeals filed by the four defendants, and in so doing amended the fines imposed at first instance. In particular, the first and second applicants were ordered to pay RSD 5,000 and RSD 2,000,000, (approximately EUR 60 and EUR 23,600 at that time), respectively, whilst the forwarding company and its authorised representative were fined less, i.e. RSD 500,000 and RSD 3,000 (approximately EUR 5,900 and EUR 35 at that time) respectively. The Ministry of Finance stated that the reason for this distinction was that the forwarding company had merely complied with the applicants’ request for the improper classification of the ship in question, as established on the basis of a witness statement given in the course of the proceedings. Also, the Ministry of Finance accepted that there was no intent on the part of the applicants to deceive the authorities, which was why they were found guilty under Article 340 of the Customs Act, an offence not requiring the existence of such intent but rather the mere failure to provide accurate information upon submission of a customs declaration. 11. On 25 October 2006 the applicants lodged an appeal on points of law (zahtev za vanredno preispitivanje pravosnažnog rešenja), which appeal was supplemented on 8 December 2006, 31 January 2008 and 12 February 2008. Therein, the applicants maintained, inter alia, that: (a) although the Belgrade Customs Office had taken into account two expert opinions regarding the classification of the ship, it had accepted, without proper explanation, one opinion and effectively given no credence to the other; (b) they had had no expertise to navigate their way through the complex customs proceedings, which was why they had hired the forwarding company to deal with this issue; and (c) the impugned decisions of the customs authorities had been inconsistent with their decisions in other similar cases. 12. On 26 December 2007 the Supreme Court (Vrhovni sud) ruled on the applicants’ appeal on points of law. The first applicant’s claims were rejected as inadmissible (odbačeni), since the amount of the fine imposed in his case was below the statutory threshold of RSD 100,000 (see paragraph 22 below), whilst the second applicant’s claims were considered on their merits and rejected (odbijeni). The Supreme Court endorsed the reasoning contained in the impugned decisions issued by the administrative authorities. The applicants received the Supreme Court’s judgment on 10 March 2008. 13. The second applicant was granted the possibility to pay the fine in monthly instalments, and by January 2008 the fine was paid in full. 14. The above-described proceedings were conducted on the basis of the Minor Offences Act 1989, as amended in 2004, as well as the Customs Act 2003 (see paragraphs 16-24 below). 15. Between 25 September 2006 and 10 December 2010 the Ministry of Finance and the Supreme Court of Cassation (Vrhovni kasacioni sud), applying Article 340 of the Customs Act, issued six decisions in respect of situations broadly similar to that of the applicants. Specifically, they noted that it was the responsibility of the importer to provide accurate documentation to the forwarding company and the forwarding company’s duty to properly classify the goods in the customs declaration. No intent to deceive the authorities was deemed necessary for the existence of the said offence. In two of these cases the importers were, ultimately, acquitted or formally cautioned (opomenuti), without being fined, whilst in the remaining four cases they were fined in accordance with the applicable legislation (see, for example, rešenja Ministarstva finansija od 25. septembra 2006. i 21. januara 2007, Pžc nos. 1349/05 i 667/07; as well as presude Vrhovnog kasacionog suda od 12. februara 2010, 26. marta 2010, 11. juna 2010. i 10. decembra 2010, Upr nos. 2/10, 115/10, 12/10 i 110/10). 16. Article 340 provides, inter alia, that a company, as well as its authorised representative employed therewith (odgovorno lice), shall be liable for failing to provide accurate information upon submission of a customs declaration. They shall further be fined therefor in the amount of up to RSD 25,000 or the threefold value of the imported goods, as regards a natural person and a corporate entity respectively. 17. Article 35 § 1 provides that should a natural person (fizičko lice), fail to pay the fine imposed, it shall be converted into a prison term on the basis that one day in prison shall be worth RSD 500, but that the imprisonment may not exceed a period of thirty days in all. 18. Article 36 § 2 provides that should a corporate entity fail to pay the fine imposed, it shall be collected “forcibly” (naplatiće se prinudnim putem). 19. Article 41 § 1 provides, inter alia, that a defendant may be formally cautioned, rather than fined, where there are serious extenuating circumstances. 20. Article 84 identifies, inter alia, the courts entrusted with conducting customs-related proceedings. 21. Article 234 § 1 (9) provides that proceedings shall be terminated if there is no proof that the defendant had committed the offence with which he has been charged. 22. Article 272 provides, inter alia, that a natural person, as well as an authorised representative of a corporate entity employed therewith (odgovorno lice u pravnom licu), shall be entitled to lodge an appeal on points of law if they have been fined in the amount of RSD 100,000 or more. 23. In accordance with Article 277, the Supreme Court shall, should it accept an appeal on points of law lodged by one of the parties concerned, have the power to overturn and/or amend the impugned decision or quash it and order the re-examination of the issue before the competent administrative authorities. 24. Article 17 of the Amendments Act adopted in 2004 amended Article 84 of the Minor Offences Act 1989, whereby administrative authorities were given the competence to conduct customs-related proceedings at first and second instance. 25. On 1 January 2007 this Act repealed the Minor Offences Act 1989, as amended in 2004. 26. Article 306 of the Minor Offences Act 2005 provides that it shall be applicable to all pending cases where no second instance decision has been rendered on the merits by 1 January 2007. By implication, as regards all other pending cases, including the present case, the Minor Offences Act 1989, as amended in 2004, remained applicable until their very conclusion.