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Finding of constitutionality on the exemption from licensing of the national lottery (Complaint No. 26a/2012)
(Complaint No. 26a/2012)
On 28 May 2013 the Constitutional Court of Moldova ruled on the constitutionality of the phrase (“except the state monopoly exercised in line with the Law No. 285-XIV of 18 February 1999 on gambling”) from the Article 8, para. (1) letter a) item 5) of the Law No. 451-XV of 30 July 2001 on regulating through licensing entrepreneurial activity in the version of the Law No. 267 of 23 December 2011 on changing and amending certain legislative acts. (Complaint No. 26a/2012).
Circumstances of the case
The case originated in the complaint lodged with the Constitutional Court on 24 July 2012 by the MP Serghei Sîrbu.
The author of the complaint alleged that the exemption from licensing of the joint company ”Loteria Națională a Moldovei” affects free competition, as it provides unjustified privileges for an economic agent carrying out the state monopoly, in the disadvantage of other economic agents that provide the same services, this being contrary to Articles 9 and 126 of the Constitution.
The Constitutional Court ruled on the complaint in the following composition:
Mr Petru RAILEAN, Chairman of the public sitting,
Mr Aurel BĂIEȘU,
Mr Igor DOLEA,
Mr Tudor PANȚÎRU, judges
Conclusions of the Court
Hearing the reasoning of the parties, the Court mentioned that within each market economy’s structure, besides competition, there also emerges the state established monopoly. The Court noted that the state is entitled to have monopoly on certain activities or areas.
The Court found in its case-law that in line with Article 126 para. (2) letter c) of the Constitution, state monopoly in certain fields of activity, where public administration bodies exercise their functions on producing and distributing certain types of goods or services, is not detrimental to market economy principles and free competition.
The Court noted that licensing a type of activity is a modality of the state to limit and effectively control a sensitive field from a social point of view, which affects both morality and public order.
In this context, the Court mentioned that national lottery, being a state monopoly, is fully subordinated to its policy, both through administrative bodies and through shares of the state, a fact which excludes the necessity of intervention from the Licensing Chamber for the control of this field by issuing a license.
The Court held that the amendments to the challenged law aimed at avoiding doubling the checking procedure on behalf of the entitled authorities, as well as at excluding the costly formalities of implementing the state policy in gambling (as the payment of the tax of licensing would have been the task of the founder and of the state budget).
The Court noted that by the Law on Competition No. 183 of 11 July 2012 there was introduced the notion of “enterprise with a fiscal monopoly nature”, which was granted exclusive rights to carry out a specific activity aiming at obtaining income for the state. Under the law, enterprises with a fiscal monopoly nature fall within the competition regulations to the extent which the application of these provisions does not prevent, by right and in fact, the fulfilment of the special mission they were vested with.
Thus, the Court held that the joint enterprise ”Loteria Națională a Moldovei” fits into this category, being vested with the exclusive right to run the national lottery, aiming at obtaining income for the state.
The Court stated that the working and organisation conditions of the enterprises running the regional lotteries are not homogeneous with the enterprises vested with the right to organise national lottery, which constitutes state monopoly. The former cannot compete and are not in direct competition with the enterprises vested with the right to organise national lotteries.
The Court held that the emerged situation does not qualify as a privileged treatment, given the candidates for running regional lotteries, which do not relate to the field of state monopoly, are treated equally, including by the mentioned laws.
The Court concluded that contested changes do not violate Article 9 and Article 126 of the Constitution, which safeguard the free competition in a free market economy and do not affect the substance of this safeguarded right.
Judgment of the Court
Starting with the above reasoning, Constitutional Court found constitutional the phrase (“except the state monopoly exercised in line with the Law No. 285-XIV of 18 February 1999 on gambling”) from the Article 8, para. (1) letter a) item 5) of the Law No. 451-XV of 30 July 2001 on regulating through licensing entrepreneurial activity in the version of the Law No. 267 of 23 December 2011 on changing and amending certain legislative acts. The judgment of the Constitutional Court is definitive, cannot be appealed, shall enter into force on the date of its passing and shall be published in the Official Journal of the Republic of Moldova.