Early Termination of Customs Authorisations – Unconstitutional
On 3 November 2016, the Constitutional Court of Moldova delivered its judgment on the exception of unconstitutionality of Article 73.4 of the Customs Code of Moldova No.1149-XIV of 20 July 2000.
Circumstances of the case
The case originated in the exception of unconstitutionality of Article 73.4 of the Customs Code, raised by the lawyer Petru Balan, within the case No.3-32/2015, pending before the Căuşeni Court.
Following the amendments made to Article 73.3 of the Customs Code by the Law No.324 of 23 December 2013 (which came into force on 1 January 2014), for the goods subject to finance lease contract there shall be applied the import customs procedure, and permitting their free circulation following the payment of import duties and enforcement of economic policy measures.
Prior to these amendments, it was possible for the goods introduced under a finance lease contract to be placed under the customs procedure of temporary admission.
Also, by the Law No.47 of 27 March 2014, Article 73.4 of the Customs Code was amended in this wording:
„Until 31 December 2014, including, holders of authorisations of temporary admission that introduced on the territory of the Republic of Moldova until 1 January 2014 goods subject to a finance lease:
a) hold a right to place them under import customs procedure, with the payment of import duties and enforcement of economic policy measures; or
b) are under the duty to remove them from the territory of Republic of Moldova prior to the expiry of the authorisation of temporary admission, but no later than 1 January 2015.ˮ
The author of the exception claimed that the provisions of Article 73.4 of the Customs Code - on the grounds of which the holders of authorisations of temporary admission, whose validity term has not expired, are required to place the goods subject to a finance lease under the import customs procedure - are contrary to the provisions of Articles 46.1 and 54 of the Constitution and Article 1 of Protocol No. 1 to the ECHR.
The Constitutional Court ruled on the complaint in the following composition:
Mr Alexandru TĂNASE, President,
Mr Aurel BĂIEȘU,
Mr Igor DOLEA,
Mr Victor POPA,
Mr Veaceslav ZAPOROJAN, judges
Conclusions of the Court
Hearing the reasoning of the parties and examining the casefiles, the Court recalled that pursuant to its constant caselaw the property right, as guaranteed by Article 46 of the Constitution, is in substance the right of a person to have ensured the respect for his movable and immovable goods.
Also, the ECtHR stated, as principle, that the concept of „goodsˮ of Article 1 of Protocol No. 1 to the ECHR is not limited to the ownership of tangible goods, so that other rights and interests constituting assets may be considered „property rights.ˮ According to it, goods may also be a valid license or authorisation.
In this case, the Court found that the company obtained on 10 October 2012 the authorisation of temporary admission of goods, which were the subject of a finance lease for a term up to 21 October 2015.
At the same time, the Court noted that following the amendments made/modifications operated to Article 73.3 of the Customs Code by the Law No.324 of 23 December 2013, starting with 1 January 2014, there was excluded the right to place goods subject to finance lease under the customs procedure of temporary admission. These goods shall be subject to import customs procedure, and permitting their free circulation following the payment of import duties and enforcement of economic policy measures
Thus, the Court held that following these amendments, the persons who previously obtained, for a fixed period, an authorisation of temporary admission of goods which were the subject of a finance lease, could not dispose of it. Or, the holders of these authorizations were obliged to pay import duties prior to 31 December 2014 or to remove the goods from the territory of Moldova.
The Court noted that the termination of the validity of the authorisation of temporary admission of goods prior to the deadline it had been issued, has led the economic agent, essentially, to cease the activity initiated under the finance lease contract.
The Court underscored that although it is the exclusive right of the legislator to regulate the customs procedure of goods entering the territory of Moldova, however, this fact cannot affect the legal certainty which had previously been established.
In this regard, the Court noted that under the lease contract, the material interest of the lessor resides in placing funds in order to gain profit and the material interest of the lessee is to obtain - on the behalf of the lessor and with his help - the object of lease for its temporary use or without its subsequent acquisition into property, by paying the leasing rates. In this context, the possession or use of the goods by economic agent on the grounds of a contract of finance lease is based on economic interests, giving rise to their legitimate expectation of obtaining an income by exploiting the goods.
The Court found that although the legislator has granted a period to the holders of authorisation of temporary admission to comply with new legal provisions (from 25.04.2014 to 01.01.2015), however in the absence of compensatory measures the challenged provisions represented a disproportionate burden, failing to strike a „fair balanceˮ between the requirements of the general interest of the State and the requirements of protecting the fundamental rights of the individual.
Concluding the above, the Court held that by the early termination of customs authorisations of temporary admission of goods subject of finance leasing contracts there has been admitted an excessive interference into the right of individuals to possess and use the contracted goods, affecting Article 46 of the Constitution.
Judgment of the Court
Stemming from the above reasoning, the Constitutional Court:
- admitted the exception of unconstitutionality;
- declared unconstitutional the phrase „until 31 December 2014, including," and the phrase „but no later than 1 January 2015" of Article 73.4 of the Customs Code of Moldova No.1149-XIV of 20 July 2000.
The Judgment of the Constitutional Court is final, cannot be appealed, shall enter into force on the date of passing, and shall be published in the Official Journal of Moldova.
This press-release is also available in its original version, in Romanian language.