Communicated on 13 September 2017

FOURTH SECTION

Application no. 48460/16 Kęstutis BUTKUS against Lithuania lodged on 16 August 2016

STATEMENT OF FACTS

The applicant, Mr Kęstutis Butkus , is a Lithuanian national who was born in 1964 and lives in the village of Bendorėliai in the Vilnius Region. He is represented before the Court by Mr L. Blažulionis , a lawyer practising in Vilnius.

A. The circumstances of the case

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

On 8 July 2008 the applicant obtained a certificate permitting him to work as a restructuring administrator – to administer the restructuring of private companies ( įmonių restruktūrizavimo administratoriaus pažymėjimas ). At that time the Law on Restructuring of Companies did not include a requirement for restructuring administrators to be of “high moral character” ( nepriekaištingos reputacijos ) (see R elevant domestic law below).

On 3 July 2009 the applicant was convicted of embezzlement of property of high value and sentenced to three years and six months ’ imprisonment. On 29 October 2010 an appellate court upheld the conviction but changed the sentence to a fine of 37,500 Lithuanian litai (LTL – approximately 10,860 euros (EUR)). The applicant paid the fine on 11 November 2010. On 12 April 2011 the Supreme Court upheld the judgment of the appellate court.

In line with the relevant provisions of the Criminal Code, the crime of which the applicant had been convicted was classified as serious ( sunkus nusikaltimas ) and the conviction would be spent ( teistumas išnyks ) five years after the serving of the sentence.

On an unspecified date the applicant applied to the Vilnius District Court to have his conviction spent ( panaikinti teistumÄ… ) before the end of the five ‑ year period on the grounds that a year and a half had passed since he had paid the fine, he had not committed any further criminal offences, he was employed, and his employer had given him a positive character reference. On 8 June 2012 the Vilnius District Court granted his request and ruled that the conviction was spent.

On 1 October 2010 a new version of the Law on Restructuring of Companies entered into force (see Relevant domestic law b elow). Article 16 § 1 (1) provided that an individual seeking to work as a restructuring administrator had to be o f high moral character. Article 16 § 2 (1) provided that an individual would not be held to be of high moral character if he or she had been convicted of a serious or very serious crime, irrespective of whether the conviction was spent ( nepriklausomai nuo to, ar teistumas išnykęs ), or if he or she had been convicted of any other criminal activity and the conviction was not spent ( teistumas neišnykęs ).

On 7 August 2014 the Department of Companies ’ Insolvency Management under the Ministry of Economy revoked the applicant ’ s certificate on the grounds that, in line with Article 16 § 2 (1) of the Law on Restructuring of Companies, the applicant did not fulfil the high moral character requirement because of his conviction for a serious crime.

The applicant complained to the Vilnius Regional Administrative Court. He submitted that, at the time when he had obtained the certificate, the Law on Restructuring of Companies had not included a high moral character requirement, so retroactively applying the new stricter version of that Law was contrary to the principle of lex retro non agit . The applicant also argued that the high moral character requirement was applicable only to individuals seeking to obtain the certificate permitting them to work as a restructuring administrator but not to those who had already obtained it, and thus it could not constitute grounds for revocation. In any event, the applicant argued, he fulfilled the high moral character requirement – he had never received any disciplinary penalties related to his work as a restructuring administrator; his conviction had not been related to his professional activity; he had been given a minor sentence – a fine; and the conviction was spent before the end of the five-year period. In the applicant ’ s view, all these circumstances attested to his high moral character. He further argued that he was being punished twice for the same criminal act – first by the criminal conviction and then by the revocation of the certificate – in breach of the principle of ne bis in idem . The applicant also submitted that the impugned decision had not complied with the time ‑ limits set out in law and that it had been taken without a recommendation from restructuring administrators ’ certification authority.

The applicant also asked the court to refer the matter to the Constitutional Court for a ruling on whether Articles 16 § 2 (1) and 18 § 3 (4) of the Law on Restructuring of Companies complied with the Constitution, in that they permanently banned individuals convicted of serious or very serious crimes from working as restructuring administrators (see Relevant domestic law below) – the applicant submitted that a permanent ban was disproportionate and discriminatory. He lastly asked the court to order interim measures and suspend the decision to revoke his certificate, on the grounds that at that time he was administering the restructuring of twelve large companies and revoking his certificate would interrupt the restructuring process and be detrimental to those companies ’ interests.

On 21 August 2014 the Vilnius Regional Administrative Court granted the application for interim measures and suspended the revocation of the applicant ’ s certificate until a final decision in the case.

On 23 March 2015 it dismissed the applicant ’ s complaint and upheld the decision to revoke his certificate. The court stated that the Law on Restructuring of Companies imperatively provided that an individual who had been convicted of a serious or very serious crime could not be held to be of high moral character and thus could not work as a restructuring administrator, irrespective of whether the conviction was spent. It observed that, at the time when the applicant had obtained his certificate, the same high moral character requirement had appeared in rules adopted by the Minister of Economy (see Relevant domestic law below). The court dismissed as having no basis in law the applicant ’ s argument that the high moral character requirement applied only to individuals seeking to obtain a certificate but not to those who had already obtained it. It also held that the principle of ne bis in idem had not been breached because the applicant ’ s criminal conviction for embezzlement and the revocation of his certificate for failure to fulfil the high moral character requirement concerned different acts and had had different purposes. The court further held that the procedural shortcomings in the adoption of the impugned decision, indicated by the applicant, had not been such as to make it unlawful. Lastly, it stated that it had no doubt that the Law on Restructuring of Companies complied with the Constitution, and thus refused to refer the matter to the Constitutional Court.

The applicant submitted an appeal against that decision, raising essentially the same arguments as before. He also contended that the high moral character requirement for restructuring administrators was stricter than for other similar professions, such as civil servants – a criminal conviction did not preclude individuals from applying to the civil service once it was spent or after a certain period of time had passed, in contrast to the permanent ban in the case of restructuring administrators. In the applicant ’ s view, such treatment was discriminatory. He also reiterated his request for the court to refer the matter to the Constitutional Court for a ruling on whether such a permanent ban was in line with the Constitution.

On 17 February 2016 the Supreme Administrative Court dismissed the applicant ’ s appeal and upheld the first-instance decision in its entirety. It held that it was within the discretion of the legislature to increase the requirements for a restructuring administrator and other similar professions, such as insolvency administrators and bailiffs, so the applicant ’ s arguments relating to the principle of lex retro non agit were unfounded. The court further stated:

“It is submitted in the appeal that Articles 16 § 2 (1) and 18 § 3 (4) of the Law on Restructuring of Companies are contrary to the principles of equality before the law and proportionality because the Law on Insolvency of Companies does not contain a similar high moral character requirement and because the ban on working as a restructuring administrator should not be permanent.

In this regard, the Chamber notes that Article 11 2 §§ 1 and 3 of the Law on Insolvency of Companies ... establish analogous high moral character requirements for an insolvency administrator, and Article 11 5 § 5 (4) provides that an insolvency administrator ’ s certificate shall be revoked when its holder no longer fulfils the high moral character requirements set forth in Article 11 2 § 3. Furthermore, it must be noted that Article 16 § 2 (2) of the Law on Restructuring of Companies provides that an individual cannot be considered to be of high moral character if he or she has been dismissed from work or office for disciplinary violations or has lost the right to engage in a certain kind of work for failure to fulfil the high moral character requirement set forth in the relevant laws or for breaches of the rules of ethics, and less than three years have passed since the dismissal or loss of that right. Therefore, the aforementioned submissions of the appellant are dismissed as unfounded.”

The court lastly stated that it had no doubt that Articles 16 § 2 (1) and 18 § 3 (4) of the Law on Restructuring of Companies complied with the Constitution, and refused to refer the matter to the Constitutional Court.

B. Relevant domestic law

1. High moral character requirement for restructuring administrators

(a) Law on Restructuring of Companies

The Law on Restructuring of Companies entered into fo rce on 1 July 2001. From that date until 1 October 2010 it did not contain a high moral character requirement for restructuring administrators.

A new version of the Law entered into force on 1 October 2010. Since that date, its relevant provisions have provided (with the exception of Article 16 § 2, which was partly amended on 1 July 2014 – see below):

Article 16. Requirements for individuals seeking to obtain the right to provide restructuring administration services

“1. [ An individual] seeking to obtain the right to provide restructuring administration services must:

1) be of high moral character;

...

2. An individual cannot be held to be of high moral character if he or she:

1) has been convicted of a serious or very serious crime, irrespective of whether the conviction is spent, or has been convicted of any other criminal offence and the conviction is not spent;

2) has been dismissed from working as a prosecutor, judge, advocate, assistant advocate, notary, candidate notary, notary ’ s representative, court bailiff, bailiff, bailiff ’ s representative, or assistant bailiff for disciplinary violations, or has been dismissed from civil service as a disciplinary penalty, or has been dismissed from [other type of] employment for a grave disciplinary breach, or his or her certificate permitting him or her to provide restructuring administration services has been revoked, and less than three years have passed since the dismissal or the revocation;

...”

Article 18. Issuing and revoking a restructuring administrator ’ s certificate

“...

3. A restructuring administrator ’ s certificate is revoked when:

...

4) the restructuring administrator no longer fulfils the high moral character requirement contained in Article 16 § 2 of this Law;

...”

Article 16 § 2 was partly amended on 1 July 2014 and currently reads:

“2. An individual cannot be held to be of high moral character if he or she:

1) has been convicted of a serious or very serious crime, irrespective of whether the conviction is spent, or has been convicted of any other intentional criminal offence and the conviction is not spent;

2) has been dismissed from work or office for disciplinary violations, or has lost the right to engage in a certain kind of work for failure to fulfil the high moral character requirement established in the relevant laws or for breaches of the rules of ethics, and less than three years have passed since the dismissal or loss of that right;

...”

(b) Rules on the right to provide insolvency and restructuring administration services

The relevant parts of the rules on the right to provide insolvency and restructuring administration services, adopted by the Minister of Economy and in force from 10 October 2006 until 11 May 2011, provided:

“2. Definitions of terms used in these Rules:

...

High moral character – an individual cannot be held to be of high moral character if he or she has been convicted of a serious or very serious crime, irrespective of whether the conviction is spent, or convicted of any other criminal offence and the conviction is not spent ... ;

5. An individual seeking to provide insolvency administration services must:

5.1. be of high moral character;

...

10. An individual seeking to provide restructuring administration services must fulfil the requirements set forth in paragraph 5.1 ... of these Rules ...”

2. High moral character requirement for certain other professions

(a) Laws which include a permanent ban on exercising a profession after a criminal conviction for a serious or very serious crime

The Law on Insolvency of Co mpanies entered into force on 1 July 2001. It did not contain high moral character requirements for insolvency administrators until it was amended with effect from 1 March 2012. From that date until 14 October 2014, Article 11 2 § 3 (1) provided that an individual could not be held to be of high moral character if he or she had been convicted of a crime against economic or business order, the financial system, civil service or public interest, or any other serious or very serious crime, and the conviction was not spent. Since 14 October 2014, Article 11 2 § 3 (1) provides that an individual cannot be held to be of high moral character if he or she has been convicted of a serious or very serious crime, irrespective of whether the conviction is spent, or convicted of any other intentional criminal offence and the conviction is not spent.

The Law on Courts (in force since 1 January 1995 without relevant amendments), the Law on the Prosecutor ’ s O ffice (in force since 1 January 1995 without relevant amendments) and the Law on Bailiffs (in force since 1 January 2003 without relevant amendments) all contain a high moral character requirement for judges, prosecutors and bailiffs, respectively, and state that an individual cannot be held to be of high moral character if he or she has been convicted of a serious or very serious crime, irrespective of whether the conviction is spent (Article 52 § 1 of the Law on Courts, Article 25 §§ 1 and 3 of the Law on the Prose cutor’s Office and Articles 4 § 1 and 5 § 1 of the Law on Bailiffs).

The Law on the Notarial Profession e ntered into force on 1 December 1992. It did not contain high moral character requirements for notaries until it was amended with effect from 23 January 2003. Since that date, Article 3 provides, inter alia , that a notary must be of high moral character and that an individual cannot be held to be of high moral character if he or she has been convicted of a serious or very serious crime, irrespective of whether the conviction is spent.

(b) Laws which do not currently include a permanent ban on exercising a profession after a criminal conviction for a serious or very serious crime

The Law on the Bar, from its entry into force on 6 April 2004 until 15 April 2008, provided in Article 8 § 1 that an individual could not be held to be of high moral character and admitted to the Bar if he or she had been convicted of a serious or very serious crime, irrespective of whether the conviction was spent, or convicted of any other intentional criminal offence and the conviction was not spent. From 15 April 2008 until 2 July 2013, Article 8 § 1 provided that an individual could not be held to be of high moral character and admitted to the Bar if he or she had been convicted of an intentional criminal offence, irrespective of whether the conviction was spent, or convicted of any other criminal offence and the convict ion was not spent. Since 2 July 2013, Article 8 § 1 provides that an individual cannot be held to be of high moral character and admitted to the Bar if he or she has been convicted of a serious or very serious crime and the conviction is not spent and less than four years have passed since the serving of the sentence or being released from serving the sentence.

The Law on the Civil Service entered into force on 30 July 1999. It established a requirement for civil servants to be of high moral character but did not specify the criteria for being held to be of high moral character until it was amended with effect from 28 April 2011. Since that date, Article 3 1 § 1 provides that an individual cannot be held to be of high moral character and be admitted to the civil service if, inter alia , he or she has been convicted of a serious or very serious crime and the conviction is not spent; or has been convicted of a crime against the civil service or public interest, or a crime related to corruption, and the conviction is not spent; or has been convicted of a crime which has caused pecuniary damage to the State and the conviction is not spent.

COMPLAINT

The applicant complains under Article 8 of the Convention, taken alone and in conjunction with Article 14, about the permanent ban on him working as a restructuring administrator because of his previous conviction.

QUESTION TO THE PARTIES

Has there been a violation of Article 8 of the Convention, taken alone and in conjunction with Article 14, on account of the fact that the applicant is permanently banned from working as a restructuring administrator because of his previous conviction (see, mutatis mutandis , Linkevičienė and Others v. Lithuania ( dec. ), no. 33556/07 a nd 2 others, §§ 110-12, 20 June 2017; Lekavičienė v. Lithuania , no. 48427/09, §§ 55-56, 27 June 2017 (not yet final); and Jankauskas v. Lithuania (no. 2) , no. 50446/09, §§ 75-76, 27 June 2017 (not yet final))?