CONCURRING OPINION OF JUDGES O’LEARY AND MOUROU-VIKSTRÖM

1. We join our colleagues in finding a violation of Article 1 of Protocol No. 1 of the Convention in relation to a fine for breach of customs regulations imposed on the applicant in her capacity as a customs clearance office employed by a company whose goods were confiscated for the same reason.

However, we have concerns about the legal basis chosen for this finding. Our concerns relate principally to the lawfulness of the impugned fine in the circumstances of this case and to the broader consequences of the proportionality assessment as undertaken by the Chamber in relation to a statutory fine of this nature.

2. The first and most important requirement of Article 1 of Protocol No. 1 is that any interference by a public authority with the peaceful enjoyment of possessions should be lawful. The second sentence of the first paragraph authorises a deprivation of possessions only “subject to the conditions provided for by law” and the second paragraph recognises that the States have the right to control the use of property by enforcing “laws”. Moreover, the rule of law, one of the fundamental principles of a democratic society, is inherent in all the articles of the Convention (see, for example, Lekić v. Slovenia [GC], no. 36480/07, 11 December 2018, § 94; Broniowski v. Poland [GC], no. 31443/96, 22 June 2004, § 147, or Kurban v. Turkey , no. 75414/10, 24 November 2020, § 76). The existence of a legal basis in domestic law does not suffice, in itself, to satisfy the principle of lawfulness. One of the requirements flowing from the expression “provided for by law” is foreseeability, which is often intertwined with the requirement that there be an absence of arbitrariness and procedural safeguards. The individual concerned must be afforded a reasonable opportunity to present their case to the responsible authorities for the purpose of effectively challenging the measures interfering with the rights guaranteed by that provision (see, amongst many other authorities, Lekić , cited above, § 95).

The question whether a fair balance has been struck between the demands of the general interest of the community and the requirements of the protection an individual’s fundamental rights becomes relevant only once it has been established that the impugned interference satisfies the requirement of lawfulness and was not arbitrary ( Iatridis v. Greece , no. 31107/96, 25 March 1999, § 58).

3. The legislative provision at issue in the present case - Article 483 § 1 of the Customs Code - refers to the “illegal aim of concealing goods from customs control” (see § 26 of the judgment). As per the judgment, the aim or intent of the declarant to provide false data and documents is thus one of the constituent elements of the administrative offence which needed to be established before a fine could be imposed. The applicant consistently and coherently argued at domestic level that she had provided the wrong data to the customs authorities by mistake, following an incorrect invoice that had been sent to her by her employer. Her employer confirmed this fact in a subsequent letter. Consequently, the District Court discontinued the administrative offence proceedings because the crucial element of deliberate concealment had not been established, finding that the applicant had been unaware of the mistake. On appeal, the Regional Court of Appeal overturned this decision in a judgment which contained “no assessment of the relevant circumstances, including the diligence and behaviour of the applicant” (see § 30 of the judgment).

4. This lack of assessment points not to the disproportionality of the fine but rather to a lawfulness problem. While the Court has limited power to assess the facts and review compliance with domestic law, the Court of Appeal in the present case not only did not prove the applicant’s intent to conceal goods, it failed to engage with or address the applicant’s arguments and evidence in this regard altogether. As a result, a fine formally provided by law was applied to a person for whom the constituent elements of the offence had not been made out. Questioned by the Court about the general interpretation and application of Article 483 § 1 of the Customs Code, the respondent State failed to provide details of relevant domestic case-law. Based on the information available to the Court, the impugned interference cannot be regarded as having been lawfully imposed. This central aspect of the applicant’s case could, alternatively, and perhaps even more convincingly, have been examined under Article 6 § 1 of the Convention, had the Ukrainian Government also been given notice of the applicant’s complaint thereunder and not only as concerns the alleged interference with her property rights.

5. Regarding the proportionality of the fine, the judgment suggests that the lack of discretion following from the fine mandatorily being equal to the value of the goods “left no room to the Ukrainian courts for the assessment of the individual situation” (see § 31 of the judgment), thereby leaving the applicant devoid “of any possibility of arguing her case with any prospect of success in the proceedings against her” (ibid, § 32). However, had the domestic courts engaged with the applicant’s arguments and the evidence she presented, success was clearly not excluded, her employer having admitted its fault.

6. The judgment further finds that a rigid system in which a fine is necessarily equal to the value of the goods the subject of an intentionally erroneous declaration, with no exceptions based on individual circumstances being provided, is incapable of ensuring the requisite fair balance between the requirements of the general interest and the protection of an individual’s property (ibid, § 31). Yet, it is the very nature of fines that they are often imposed by general and mandatory legislation where the balancing exercise has to some extent been undertaken by the legislature itself. We do not exclude that the Ukrainian Customs Code may be lacking, but there are gaps too in the Chamber’s assessment of the proportionality of a statutory fine. While recognising that Article 1 of Protocol No. 1 can apply to fines, the Court has often found even very large fines not to be disproportionate (see Phillips v. the United Kingdom , no. 41087/98, 5 July 2001; Valico S.r.l. v. Italy (dec.), no. 70074/01, 21 March 2006 ; DELTA PEKÁRNY a.s. v. the Czech Republic , no. 97/11, 2 October 2014). It has held that even fines that “might, at first sight, appear exorbitant” (see Valico S.r.l. , cited above), can strike a fair balance between the general interest and the applicants’ property rights. These findings have been based on the fact that the public interest weighs very heavily in these cases; a fine being the result of an established breach of the law – the very thing lacking in the applicant’s case - and its purpose being punitive and acting as a deterrent (see Phillips , cited above, § 52). The Court’s previous case law therefore does not support the majority’s overbroad suggestion that large and mandatory fines are necessarily incapable of guaranteeing a fair balance. Furthermore, the Chamber judgment relies on judgments like Gyrlyan v. Russia (no. 35943/15, 9 October 2018) which on the facts are very different; the relevant authorities having accepted the applicant’s lack of intent to deceive in that case. Finally, in the instant case, a fine was imposed (unlawfully) on a person not the owner of the goods the subject of the erroneous declaration and several factors were left unclear not least the question of the remedies open to the applicant to recoup the fine from the owner of the goods, whether and if so how much of the fine she had actually paid, and the existence of a limitation period in regard to the administrative offence. This was not, therefore, a good case in which to tackle any systemic problem in Ukraine as the Chamber simply lacked sufficient information to provide a well-formulated response.

7. Thus, while we agree with the finding of a violation in the present case, we do so for different reasons. In our view, the Chamber judgment highlights, moreover, the need for more consistency and refinement in cases under Article 1 of Protocol No. 1 of the Convention in relation to confiscation measures and fines for failure to comply with customs regulations. In too many cases the general interest behind such legislative choices is side-lined or downplayed, with the Court’s focus on whether an individual and excessive burden is borne following the application of sanctions whose very purpose is to act as a deterrent and be punitive.

[1] The amount of her renumeration in Ukrainian hryvnias was converted into euros as of the date of submission of the applicant’s observations.