(Podgorica, 13 October 2012) – I am informing you that following the decision of the Constitutional Court that ruled that the “euro by euro” law is constitutional, as the authorized representative of 24 MANS employees I’ve prepared a briefing for the European Court for Human Rights, which we will send to the court in Strasbourg with accompanying information.
In the briefing the following points are underlined:
THe decision of the Constitutional Court of Montenegro was adopted in violation of Article 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, which guarantees judicial rulings in constitutional matters if it could be decisive for civil rights and responsibilities. The complainants were stripped of the legal remedy contained in Article 13 of the Convention and the right to enjoy one’s property from Article 1 of the Protocal No. 1 related to the Convention.
The decision of the Constitutional Court consists of citations from existing regulations, quotes from financial theory books, gauging the legitimacy (not the constitutionality) of the law, quoting the constitutions of other countries, quoting the Federal Constitutional Court of Germany that are about other matters, while there is not a single ruling on the actual points raised by those who brought the initiative before the court.
The complainants also note that the composition of the Constitutional Court does not lend itself to the conclusion that this is an independent and unbiased court – i.e. there is no indication that it is independent of the executive, or more precisely the Government that was one of the parties to the dispute (and on whose position the court based its final ruling). Along these lines we drew attention to the ties between the President of the Constitutional Court Milan Markovic with the former Primer Minister and the President of the ruling DPS party, given that he received a €40,000 concessionary loan to purchase an apartment from the Government that was headed by Milo Djukanovic, and given the fact that as a member of the Legislative-Legal Committee in the Parliament of Montenegro he was receiving a stipend. He was also the member of doctoral committees at the Law Faculty that accepted the doctoral dissertations of high-ranking functionaries in the ruling DPS, including those of Miodrag Vukovic (an MP) and Boro Vucinic (former minister and now the director of the National Security Agency), which were later disputed by the University Senate since they did not meet the standards of academia but read more like political pamphlets.
It was also noted that Constitutional Court judges Miras Radovic, Miodrag Latkovic and Miodrag Ilickovic were chosen as judges from their previous positions in the executive and legislative branches (where they were receiving various sums on the basis of a variety of positions they were filling). Therefore, 4 of the 6 judges that ruled on our complaint are directly linked to the executive and legislative branches of government. It is for this reason that these judges were waiting for the Government to state its position, and only then they decided to act by basing their final ruling on the government’s official position. Given the importance that the Constitutional Court gave to the government’s position, it should have given the complainants an opportunity to respond to the government. The failure to communicate to the complainants regarding the government’s position is a violation of the principle of the equality of parties to a dispute, see Slimane-Kaïd v. France (2000), MacGee v. France (2003), Krcmár et. al. v. Czech Republic (2000), Fortum Corporation V. Finland (2003), APEH Üldözötteinek Szövetsége et. al. v. Hungary (2000) and Walston
v. Norway (2003).
The Constitutional Court also behaved in the same way when it came to the information that it claims it “obtained” from the country’s mobile operators, electricity companies, and cable distributors (and on whose position their eventual ruling was also based). This information, nor the position of the government, were never tied to the constitutionality of the law under question or the points in the law that the complainants had contested. Nevertheless, the Constitutional Court gave such opinions an importance that was reflected in its eventual decision, while failing to inform the original complainants (thus denying them the opportunity to respond).
It is only on page 5 of the Constitutional Court ruling that there is even mention of a single point that was raised by the complainants. On this page the court engages in a discussion of the conception of a ‘tax’ and concludes that taxes: “are paid as compensation for a particular service that a government body provides to a taxpayer.” Furthermore, points from financial theory books are cited and it is asserted that: “in almost every tax system there are taxes that are being paid independently of whether or not the service of a public body is being used.”
The Constitutional Court failed to explain which service exactly citizens were receiving from the state due to the fact that every month the government takes money from them, nor which public institution benefits from this tax. The complainants pointed out that it is obvious that the “euro by euro” tax is one that the government is charging to plug gaps in its budget that were caused by bad policies of the government that put it in debt to other parties, not the citizens of Montenegro, and who are the only ones currently receiving government services (because this tax money is being used to pay down their debts).
The Constitutional Court state that it: “lacks the jurisdiction to rule on the expediency and justifiability of the general tax system, that is certain models of collecting taxes and other sources of income in Montenegro.” It also confirms that the controversial law has a legitimate aim, citing the government’s opinion, thus demonstrating that it was ruling on the expediency and legitimacy of the disputed law and not on its constitutionality.
This is why the ruling by the Constitutional Court is contradictory on its own terms, violating Article 6 of the Convention (Hirvisaari v. Finland 2001). The complainants know that the goal of maintaing the stability of the budget is a legitimate goal and never disputed this aim; however, on the basis of the logic of the Constitutional Court it would be “coherent and consistent” to ensure that this legitimate aim is secured, for instance, through international trafficking.
In the incomprehensible and unreasonable decision of the Constitutional Court they state that all persons “have the right to use public goods,” and the responsibility to pay taxes to the state and “secure financial means, in order to ensure that the supply of such public goods can be provided efficiently and in a quality way,” but the court does not note which public good they are speaking of in this specific case. This violates Article 6 of the Convention, which stipulates the obligation of courts to provide rationales for their decisions, not to cite theory and speak about general rights and responsibilities and to provide unreasonable rationales that aren’t tied in any way to the demands of the parties to the dispute.
The disputed law enables the definite deprivation of taxpayer property without a reasonable basis and in a completely arbitrary manner enables illegal appropriation. It doesn’t meet the requirements of precision and predictability and does not give basic procedural guarantees to taxpayers, something that was totally ignored by the Constitutional Court of Montenegro.
The Constitutional Court in its ruling established the legitimacy of the aims that the government was seeking to accomplish through this law, even though this isn’t within its jurisdiction and even though the complainants did not challenge the legitimacy of these aims. Furthermore, in its ruling it for no apparent reason included information it had “obtained” from the country’s mobile operators, electricity companies and cable distributor, in order to establish the number of taxpayers for the month of July 2012, basing its ruling on this information as well (!?).
Similarly, the Constitutional Court in its decision also considered the question of whether or not tax obligations represent an excessive burden, interpreted the “ability to pay” according to financial theory and through comparative analysis of the constitutional provisions found in Croatia, Serbia, Italy, Spain (!?) and then confirmed that the legislative branch had the power to determine the proportionality of fiscal obligations. Therefore, the Constitutional Court didn’t respond to important point raised by the complainants, but instead considered questions that weren’t part of the initial complaint. It therefore provided an incomprehensible, unconstitutional and unreasonable analysis of the legal systems of other states, none of which has on its books a law like the Law on Taxes, infamously known as “euro by euro.”
It’s worth noting that the Constitutional Court also cited the decisions of the Constitutional Court of the Federal Republic of Germany (!?), even though this court didn’t have a chance to proclaim itself on a similar subject, given that the legal system of the FR Germany doesn’t not have any laws similar to the “euro by euro” law on its books.
It is worth recalling that the controversial law was adopted immediately following the activation of loan guarantees that the executive gave to its foreign investment partners. This indicates that the billing and collection of the controversial taxes is solely the result of bad and suspicious moves made by the executive. It is clear that the taxpayers receive no service in return for paying this tax, as the court suggests without any basis. Therefore, the courts position that denying citizens their property is in the public interest is absolutely without a rational basis and as such represents a violation of Article 1 of Protocol 1 of the Convention. The billing and collection of taxes as stipulated in the disputed law represents a non-proportional and unreasonable burden for taxpayers, representing unjust enrichment at their expense.
The Constitutional Court also neglected the fact that the disputed legislation provides that the companies involved are the ones that calculate, collect and charge the fee (not state institutions), without first introducing a law that would allow taxpayers to appeal such actions. Instead it again irrationally ruled that by not providing for individual solutions there was no violation of the right to a legal remedy, nor the right to initiating proceedings to defend one’s rights. In this sense the court draws attention to the Law on Administrative Disputes, before which the legality of administrative acts are considered. Therefore, the Constitutional Court calls on the citizen to dispute acts that don’t exist and that nobody will ever submit.
In this way the Constitutional Court confirmed a law that denies the right to access the court and that prevents the automatic monthly theft of citizen property. The monthly charge of taxes without the need to adopt a resolution or other act and without the right to appeal against such an act, represents an intervention by the state that takes away citizen property, refusing to give them the opportunity to participate in the proceedings and to submit a complaint. Confirming the constitutionality of such a law, the Constitutional Court of Montenegro has supported the violation of basic taxpayer rights – the right to a legal remedy against a decision that affects their obligations.
Veselin Radulovic
Lawyer, NGO MANS
