Communicated on 31 March 2014

FIFTH SECTION

Application no. 68475/10 Heinrich Josef BLEY against Germany lodged on 19 November 2010

STATEMENT OF FACTS

1 . The applicant, Mr Heinrich Josef Bley, is a German national, who was born in 1959 and lives in Crawinkel. He was represented before the Court by Mr K. Rüther, a lawyer practising in Osnabrück.

A. The circumstances of the case

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

3 . In 1982 the Council of the European Communities introduced a levy payable by suppliers or purchasers of cows ’ milk for any quantity of milk exceeding a certain quota. The purpose of this scheme was to reduce the imbalance between supply and demand on the milk and milk products market and the resulting structural surpluses. Under Council Regulations as implemented in German law at the relevant time, a dairy producer was obliged to pay a levy of 115 % on all quantities of milk marketed during a twelve-month period in excess of the individual quota set for the producer. Purchasers of dairy products were allowed to balance the accounts of milk suppliers who had not met their individual quota against those who had exceeded it. However, accounts of milk suppliers situated in the former East Germany could not be balanced against those of milk suppliers situated in the former West Germany.

4 . The applicant was the manager and co-proprietor of a company that supplied milk based in Thuringia (in the former German Democratic Republic (GDR)), which did not meet its individual quota from 1996 onwards and thus risked its quota being reduced. At the same time, a number of milk suppliers from Hessen (in the former Federal Republic of Germany), who delivered milk to the same dairy, exceeded their individual quotas and risked paying a levy on the surplus.

5 . Upon the suggestion of a dairy employee, the applicant concluded contracts with 26 dairy producers situated in Hessen covering different time-spans between January 1997 and September 1999. Under these contracts, the dairy producers in Hessen leased all their cattle to the applicant. The cattle were to remain in Hessen and the dairy producer in Hessen was obliged to take care of the animals, to milk the cows and to deliver the milk to the dairy. The costs for the lease were set off against the money received from the dairy. As a result of this scheme, the milk supplier in Hessen was in a position to deliver milk which was counted against the applicant ’ s quota. The applicant received the purchase price from the dairy and transferred it to the milk supplier in Hessen after deducing 0.10 German marks per litre of milk, which he kept for himself.

6 . On 14 June 2006 the Kassel District Court convicted the applicant of tax evasion and sentenced him to two years and three months ’ imprisonment.

7 . On 15 June 2005 the applicant lodged an appeal. He based the appeal, in particular, on the defence of an excusable mistake of law as to the wrongful nature of the acts in question ( Verbotsirrtum ). He submitted that he had showed the contract to his tax accountant, who had informed him that it was not problematic in terms of tax law.

8 . On 22 February 2007 the Kassel Regional Court reduced the sentence to one year and six months ’ imprisonment, suspended on probation, and rejected the remainder of the applicant ’ s appeal. The Regional Court noted that the applicant had acknowledged having known that it was impermissible to transfer quotas from East to West German dairy producers. However, this was the exact result of the contractual scheme, which did not change anything in terms of the milk supply process itself. Both contractual partners continued to manage their enterprises independently and had full ownership rights over their cattle, as well as over the milk they produced. 0.10 German marks per litre of milk were paid to the applicant as a reward for his involvement in the scheme, which was aimed at circumventing applicable regulations. As a result of this scheme, the farmers in Hessen had avoided paying more than 283,000 euros of surplus levy.

9 . The Chamber of the Regional Court considered that the applicant could have easily recognised that his actions had been unlawful . In this respect, that court noted that the applicant was an experienced farmer who had, furthermore, had various opportunities to make further enquiries. The tax accountant, when heard as a witness, had stated that he had only advised the applicant in respect of general taxation law, but not with regard to the specific regulations governing the distribution of quotas. The tax accountant had not been aware of the fact that it was unlawful to balance quotas between producers situated in the former GDR and those in the former Federal Republic of Germany. This problem had never been an issue in his conversations with the applicant. Conversely, the applicant would have been under the obligation either to duly inform the tax account about the problematic situation or to consult a lawyer. Alternatively, he could have made enquiries with the tax office or with the Chamber of Agriculture.

10 . The Regional Court concluded that the applicant was criminally liable for tax evasion under article 370(1)(1) of the Revenue Code in conjunction with sections 8(2) and 12 of the Law on the Implementation of the Common Market Organisation (MOG) and the Regulation on Milk Quotas (MGV).

11 . On 23 October 2007 the Frankfurt Court of Appeal rejected the applicant ’ s appeal on points of law as unfounded.

12 . The applicant lodged a constitutional complaint, alleging that the surplus levy of 115 % had a “chilling effect” (“ erdrosselnde Wirkung” ), because the levy to be paid exceeded the market price of the milk, and thus violated the dairy farmers ’ property rights under Article 14 of the Basic Law.

13 . On 29 April 2010 the Federal Constitutional Court, sitting as a panel of three judges, refused to admit the applicant ’ s complaint for adjudication. The Constitutional Court considered that the applicable provisions, insofar as they were subject to that court ’ s review, were compatible with the Basic Law. Conversely, the Constitutional Court did not exercise its competence to review the question whether the surplus levy violated the applicant ’ s property rights or other basic rights, as the amount of surplus levy to be charged for excess milk production was established in Regulation No. 3950/92, which did not leave any discretion to the domestic authorities.

14 . The Federal Constitutional Court further considered that the provisions relied upon by the criminal courts adequately set out the prerequisites for criminal liability. This also applied insofar as criminal liability for tax evasion in respect of the levy set by Council Regulation (EEC) No. 3950/92 was concerned. The conditions of criminal liability were, in particular, sufficiently foreseeable to those persons to whom the relevant provisions were addressed, namely dairy farmers and other persons professionally involved with the dairy industry. A person who did not at least have a basic knowledge of the milk quota system did not run the risk of criminal liability for unlawful actions in this field.

B. Relevant domestic and EU law and practice

15 . Article 234 of the Treaty establishing the European Community (former Article 177 and, since 1 December 2009, Article 267 of the Treaty on the Functioning of the European Union) provides for preliminary rulings of the Court of Justice of the European Communities as follows:

“The Court of Justice shall have jurisdiction to give preliminary rulings concerning:

(a) the interpretation of this Treaty;

(b) the validity and interpretation of acts of the institutions of the Community ...;

...

Where such a question is raised before any court or tribunal of a Member State, that court or tribunal may, if it considers that a decision on the question is necessary to enable it to give judgment, request the Court of Justice to give a ruling thereon.

Where any such question is raised in a case pending before a court or tribunal of a Member State against whose decisions there is no judicial remedy under national law, that court or tribunal shall bring the matter before the Court of Justice.”

16 . Under its established case-law, the German Federal Constitutional Court refrains from exercising judicial review over EU Law which is applied at the domestic level, as long and insofar as the European Union generally provides effective protection of human rights, which is broadly comparable to the human rights protection afforded under the German Basic Law (see the so-called “ Solange ” case-law, published in the official collection of the Federal Constitutional Court no. 73, p. 339; no. 102, p. 147 and no. 123, 267).

17 . Council Regulation (EEC) No 3950/92, as applicable from 1 April 1993, provides:

Article 1

“For seven new consecutive periods of twelve months commencing on 1 April 1993, an additional levy shall be payable by producers of cow ’ s milk on quantities of milk or milk equivalent delivered to a purchaser or sold directly for consumption during the 12-month period in question in excess of a quantity to be determined.

The levy shall be 115 % of the target price for milk.”

Article 2

“1. The levy shall be payable on all quantities of milk or milk equivalent marketed during the 12-month period in question in excess of the relevant quantity referred to in Article 3. It shall be shared between the producers who contributed to the overrun ... ”

18 . Under section 7(b)(1) of the Regulation on Milk Quotas ( Milch ‑ Garantiemengen Verordnung, MGV ) as applicable at the relevant time, a purchaser was entitled to transfer quotas which had not been utilised within a twelve-month period to other dairy producers whose deliveries had exceeded their individual quotas. However, unused quotas belonging to enterprises which were situated on the territory of the former GDR could only be transferred to dairy producers who were also situated in the same part of the country.

19 . Sections 8(2) and 12(1) of the Law on the Implementation of the Common Market Organisation ( Marktordnungsgesetz, MOG ) provide that the provisions of the Revenue Act apply by analogy to levies aimed at regulating the common market.

20 . Section 370(1) of the Revenue Act provides:

Tax evasion

“(1) A penalty of up to five years ’ imprisonment or a monetary fine shall be imposed on whoever ... furnishes the revenue authorities or other authorities with incorrect or incomplete particulars concerning matters of substantial significance for taxation, ... and as a result understates [their] tax liability or derives unwarranted tax advantages for himself or for another person.”

COMPLAINTS

21 . The applicant complained under Article 6 § 1 of the Convention that the Federal Constitutional Court had failed to ask the European Court of Justice (ECJ) to give a preliminary ruling on the lawfulness of the surplus levy imposed under EU Law.

22 . The applicant further complained under Article 7 § 1 of the Convention that the provisions relied upon by the domestic courts were insufficiently precise to justify his criminal conviction.

QUESTIONS TO THE PARTIES

1. Did the applicant have a fair hearing in the determination of the criminal charges against him, in accordance with Article 6 § 1 of the Convention? In particular, did the domestic courts fail to seek a preliminary ruling by the European Court of Justice?

2. Did the act of which the applicant was convicted constitute a criminal offence under national law at the time when it was committed, as envisaged by Article 7 of the Convention? In particular, was it sufficiently foreseeable from the pertinent legislation what acts and omissions would make the applicant criminally liable?