THIRD SECTION

DECISION

AS TO THE ADMISSIBILITY OF

Application no. 51728/99 by Bronisław ROSENZWEIG and Bonded Warehouses Limited against Poland

The European Court of Human Rights (Third Section), sitting on 2 September 2004 as a Chamber composed of:

Mr G. Ress , President , Mr I. Cabral Barreto , Mr L. Caflisch , Mr B. Zupančič , Mr J. Hedigan , Mrs M. Tsatsa-Nikolovska , Mr L. Garlicki , judges ,

and Mr M. Villiger , Deputy Section Registrar ,

Having regard to the above application lodged on 1 March 1999,

Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,

Having deliberated, decides as follows:

THE FACTS

The first applicant, Mr Bronisław Rosenzweig, is a Polish national, who was born in 1941 and lives in Berlin. The second applicant is “Bonded Warehouses Ltd”, a public company. The applicants are represented before the Court by Mr K.-H. Schmitz, a lawyer practising in Berlin and Mr W. Szaj, a lawyer practising in Poznań.

The circumstances of the case

The facts of the case, as submitted by the parties, may be summarised as follows.

On 18 February 1994 the Main Customs Office granted a licence to run a bonded warehouse in Słubice to the applicant company “International Bonded Warehouses Ltd.”.

On 29 May 1995 the German customs office at Frankfurt/ Oder stated that the German customs authorities had no objections to the operation of the applicant company.

On 1 June 1995 a further permit was given for exporting merchandise via the border crossing in SÅ‚ubice by the Director of the local Customs Office in SÅ‚ubice .

The applicants submit that the staff of the local customs office, in particular its Director, repeatedly suggested that the company should pay various bribes to the customs officials if it wished to continue its operation undisturbed.

By a letter of 22 November 1995 the Director of the local Duty Office in SÅ‚ubice stated that from 27 November 1995 on he would revoke the permit of 1 June 1995 for exporting merchandise via the SÅ‚ubice border crossing. It was argued that the permit of 1 June 1995 was not in conformity with an agreement with the Federal Republic of Germany regarding the border crossings and transborder movements of goods and persons.

On 27 November 1995 the customs officers ordered that the headquarters of the applicant company be closed and affixed official seals on its door, preventing it thereby from conducting further business. On the same day  the applicant company complained to the Main Customs Office, submitting that there were no legal grounds on which the permit should be revoked and that the letter of 22 November 1995 was not an administrative decision, which made it impossible to lodge a formal appeal against it.

In a letter of 21 December 1995 the applicant company reiterated its complaint and stressed that the director of the Słubice Customs Office had failed, despite the company’s repeated requests, to give any legal basis for the revocation of the permit. It was argued that the acts of the director breached economic freedom as guaranteed by the Constitution, and clearly infringed the terms of a valid licence which the company had received from the Main Customs Office in February 1994.

On 9 February 1996 the applicant company lodged a complaint under Article 17 of the Supreme Administrative Court’s Act about the Main Customs Office’s failure to give a decision following the appeal of 27 November 1995. It was submitted that the company had a valid licence given under the provisions of customs law. However, the company’s operation had been de facto rendered impossible by the letter of 22 November 1995 as it could not run the warehouse if it was not allowed to export merchandise.

In reaction to this complaint, on 14 February 1996 the Main Customs Office informed the applicant company that the permit of 1 June 1995 was of a temporary character. It was to remain valid only until a bridge in nearby Świeck was to be constructed. After the construction of this bridge had been terminated, the border crossing in Słubice was to be used only for small transborder movement of goods and persons.  This was to be understood as allowing for crossing of the border by persons, but taking merchandise out of the country via this crossing did not fall within the ambit of the notion of the “small trans-border movement of goods and persons” and therefore the permit of 1 June 1995 had to be revoked under Article 21 of the Customs Law.

The applicant company appealed, submitting that the revocation of the exporting permit would practically mean that the company had to stop its business operation, carried out under the valid licence of February 1994.

On 21 August 1996 the applicant company and the Director of the Legal Department of the Main Customs Office concluded a settlement to the effect that the applicant company would withdraw its appeal it had lodged with the Supreme Administrative Court against the position taken by the Office in its letter of 14 February 1996 and the President of the Office would set aside the decision of the Director of the SÅ‚ubice Customs Office of 22 November 1995.

On 21 December 1996 the Main Customs Office set the decision of 22 November 1995 aside and ordered that the question be re-examined by the Director of the SÅ‚ubice Customs Office.

By a letter of 31 January 1997 the German customs office at Frankfurt/ Oder confirmed that the German customs authorities had no objections whatsoever against the operation of the applicant company.

On 28 May 1997 the Rzepin Customs Office revoked the permit for exporting merchandise by the applicant company via Słubice , stating that the Słubice border crossing was under Polish law designed only for the so-called “small trans-border movement of goods and persons” and that, therefore, no merchandise could be exported via this crossing.

The applicant company appealed.

On 20 August 1997 the Main Customs Office quashed the decision of 28 May 1997 and discontinued the proceedings, considering that the impugned decision had been in breach of provisions of procedural law since it had not been given in any of the types of proceedings on the merits provided for by the Code of Administrative Procedure.

The applicant company requested that the legal meaning of this decision be interpreted. It emphasised that it was important for it to have clarified whether the original permit of 1 June 1995 was still valid.

In an interpretative decision of 23 September 1997 the Main Customs Office explained that the fact that the decision of 28 May 1997 had been set aside was to be understood in such a way as to mean that the legal situation existing before this decision had been given still obtained.

The applicant company requested that this issue be re-examined, asking whether the quashing of the decision of 28 May 1997, revoking the permit of 1 June 1995, was to mean that this permit was valid.

In a decision of 14 November 1997 the Main Customs Office held that the purpose of the decision of 23 September 1997 was not to decide whether the permit of 1 June 1995 was still valid. It upheld the decision of 23 September 1997.

The applicant company appealed to the Supreme Administrative Court, arguing that the decisions of the Main Customs Office lacked clarity. The Office had set aside the revocation of the permit, but did not confirm whether the original permit was valid. Therefore it was impossible to establish what was the actual legal situation of the company as regards the validity of its permits. The company argued that it was de facto treated by the customs authorities as if the export permit of June 1995 had been effectively revoked.

In a judgment of 2 April 1998 the Supreme Administrative Court quashed the decisions of 23 September and 14 November 1997. The court found that the decision of 23 September lacked clarity in that it did not allow the applicant company to clarify the fundamental uncertainty as to the legal consequence of this decision. Neither were these doubts dispelled by the decision of 14 November in which the Main Customs Office had failed to explain what was the legal position of the applicant as regards its licence to run its business, and in particular, whether it could rely on the permit of 1 June 1995.

By a decision of 5 June 1998 the Main Customs Office stated that the decision of 20 August 1998 was to be understood in such a way that the applicant’s rights stemming from the decision of 1 June 1995 remained intact.

On 20 June 1998 the Main Customs Office instituted proceedings in order to have the licence to run the warehouse of 18 February 1994 set aside, considering that the applicant company had not been operating its business for a period longer than three months, without having informed the competent authorities thereof, as required by law.

On 30 November 1998 the Main Customs Office set aside the 1994 licence to run the warehouse, having found that after 20 August 1997 the applicant company had ceased its business activities. Under the provisions of the Customs Code, the customs authorities were obliged to withdraw the licence to run the bonded warehouse if the company enjoying such licence was not exercising it for a period longer than three months.

The applicant company appealed. It argued inter alia that it could not have run the warehouse after 20 August 1997, given that the SÅ‚ubice Customs Office had withdrawn its permit for exporting merchandise by the applicant company via SÅ‚ubice , which had made it impossible to continue its business operation.

On 5 March 1999 the Main Customs Office, having re-examined the case, discontinued the appellate proceedings. The office observed that the applicant was wrong in confusing the proceedings regarding the validity of the June 1995 permit with the present proceedings, in which it was the validity of the 1994 licence which was at issue. The validity of the 1994 licence had not been questioned in the previous proceedings and therefore there were no grounds on which to accept that the applicant was prevented to run its business.

It finally noted that the proceedings had to be discontinued since on 1 January 1998 a new Customs Code had entered into force. It provided that various customs licences issued under the old Customs Act were to remain valid for twelve months, during which companies having such licences could lodge new requests to have new licences issued. The applicant company had not submitted such request and the validity of its 1994 licence had expired on 31 December 1999. Therefore the proceedings had become devoid of purpose and as such should be discontinued.

The applicant company appealed. It argued, inter alia , that when giving the contested decision, the Main Customs Office had breached the law in that it entirely failed to take into consideration all circumstances relating to the proceedings concerning the withdrawal of the permit to export. These proceedings, which had lasted from August 1997 until June 1998, had rendered it impossible for the company to continue its business operation. Therefore it was unreasonable to revoke the 1994 licence on the ground that the company had ceased its business activities.

On 5 November 1999 the Supreme Administrative Court quashed the decision of 5 March 1999 as not being in compliance with law. It considered that the Main Customs Office had incorrectly ruled that the proceedings had become devoid of purpose. At the time when they had been instituted, i.e. on 20 June 1998, the applicant company’s licence was still valid. It therefore had a legal interest in clarifying its legal situation and to confirm whether it was still authorised to run its business.

On 23 March 2000 the Main Customs Office, having regard to the judgment of 5 November 1999, set aside the decision of 30 November 1998, revoking the 1994 licence to run the warehouse.

COMPLAINTS

The applicants complain under Article 1 of Protocol No. 1 that their right to peaceful enjoyment of his property was infringed in that the customs authorities withdrew valid administrative decisions allowing them to run their business, by, first, revoking the permit to export merchandise, and later, by revoking the licence to run the warehouse. The first applicant could not run the business in which he had invested very considerable sums of money. These decisions ultimately proved unlawful. The applicants complain that the applicant company was subject to administrative harassment. The applicants complain that the acts of the local customs administration amounted to unlawful and continuous pressure exerted in order to obtain illegal “favours” form the company.

The applicants complain under Article 6 that the proceedings concerning the administrative permits the company needed to run its business, lasted five years which exceeded a reasonable time.

The first applicant, who is Jewish, complains under Article 3 read together with Article 14 of the Convention that the acts of the local customs administration in SÅ‚ubice amounted to treatment prohibited by Article 3 as they were motivated by anti-Semitism.

THE LAW

1. The applicants complain under Article 1 of Protocol No. 1 that their right to peaceful enjoyment of their property was infringed in that the customs authorities withdrew valid administrative decisions allowing them to run their business.

Article 1 of Protocol No. 1 reads:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

The Government argue that the state is entitled to enact laws and to give administrative decisions necessary in order to control the flow of merchandise into their territories. The decisions given in the present case therefore pursued the general interest. As to the proportionality of the interference, they first argue that the applicants’ business activities involved storing of goods which were entering the territory of the state and leaving it. Moreover, the authorities were under an obligation to supervise whether the applicants’ business activities were in accordance with international agreements entered into by Poland. The lack of any control whatsoever performed by the customs authorities could have led to substantial losses in the state budget.

They conclude that the control over the applicants’ business activities was not only necessary, but also in accordance with the most vital general interest of the state. It was open to the applicants to challenge the lawfulness of decisions given in their case before the Supreme Administrative Court and they availed themselves of this possibility.

The applicants first submit that the domestic authorities relied, when revoking the licence on 22 November 1995, on the alleged lack of conformity of that licence with the agreement with the Federal Republic of Germany regarding the trans-border movement of goods and persons. However, the German authorities later confirmed, by a letter of 31 January 1997, that they had no legal objections to the operation of the applicant company.

The applicants further submit that the customs authorities failed to give a formal decision revoking the June 1995 licence, but only sent a “letter” to the applicants to this effect. This by itself was in breach of applicable procedural provisions of Polish administrative law as it should have been done in the form of a proper administrative decision, and made it difficult for the applicants to pursue normal appeal procedure. The withdrawal of the licence was unjustified, because no legal changes had been introduced between June and November 1995 to make the withdrawal necessary. After November 1995 the applicants could not run the business activity and did not have access to their property as the warehouse had been sealed on 22 November 1995.

The applicants emphasise that the Supreme Administrative Court which twice examined the company’s appeals against the decisions given in the case at both occasions found the challenged decisions unlawful and quashed them by its judgments of 2 April 1998 and 5 November 1999.

The applicants argue that they do not challenge the state’s power to apply laws and issue licences for certain kinds of business activities. However, in their case it was never argued or shown by the domestic authorities competent to supervise the applicants’ business operation that it had been in breach of any provision of Polish law or of international law. It has not therefore been shown that the measures complained of were proportionate to the aim sought, as no causal link whatsoever has been demonstrated between any acts  of the applicants’ and the decisions that obliged them to close their business down.

The applicants emphasise that they were conducting their business operation for a very short period, and that, as a result of the revocation of the licences previously granted to them, they therefore incurred serious losses. The investment that the first applicant made into the company was never recovered, and as a result of the measures taken in the present case the company did not develop its full business potential and failed to bring income which he could reasonably expect when he had been given the original licence in June 1995.

The Court considers, in the light of the parties’ submissions, that the complaint raises serious issues of fact and law under the Convention, the determination of which requires an examination of the merits. The Court concludes therefore that this complaint is not manifestly ill-founded within the meaning of Article 35 § 3 of the Convention. No other ground for declaring it inadmissible has been established.

2. The applicants complain under Article 6 of the Convention that the proceedings concerning the administrative permits which the company needed to run their business lasted five years, which exceeded a reasonable time. The Government disagree.

The Court first observes that in fact in the applicants’ case it was not one set of proceedings which was concerned, but, technically, at least four, three of them on the merits, and one concerning exclusively an interpretation to be given to the decision of 20 August 1997. Moreover, these proceedings concerned different aspects of the applicants’ legal situation, certain sets relating to the licence of June 1995 and others to another licence, given in February 1995. Consequently, the Court is, firstly, of the view, that they cannot be all examined from the angle of Article 6 of the Convention insofar as it guarantees a right to a fair hearing within a reasonable time. What is more, the Court considers that this complaint is in substance identical to that already examined in the context of Article 1 of Protocol No. 1, the fundamental aspect of the applicants’ case being obviously that by successive and intrusive administrative proceedings they were hindered in their normal business operation.

Consequently, no separate issue arises under Article 6 of the Convention.

3. The first applicant, who is Jewish, complains under Article 3 read together with Article 14 of the Convention that the acts of the local customs administration in SÅ‚ubice amounted to a treatment prohibited by Article 3 as they were motivated by anti-Semitism.

The Court has examined this complaint under Article 3 which reads:

“No one shall be subjected to torture or to inhuman or degrading treatment or punishment.”

The Court observes that the applicant has not substantiated in any way his allegations of discriminatory treatment in breach of the provisions of Articles 3 and 14 of the Convention. It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 and 4 of the Convention.

For these reasons, the Court unanimously

Declares admissible the applicants’ complaint that their right to the peaceful enjoyment of the property was infringed in that the customs authorities withdrew valid administrative decisions allowing them to run their business;

Declares the remainder of the application inadmissible.

Mark V illiger Georg Ress              Deputy Registrar President