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FOURTH
SECTION
CASE OF RUOTSALAINEN v. FINLAND
(Application
no. 13079/03)
JUDGMENT
STRASBOURG
16 June
2009
This
judgment will become final in the circumstances set out in Article 44
§ 2 of the Convention. It may be subject to editorial
revision.
In the case of Ruotsalainen v.
Finland,
The
European Court of Human Rights (Fourth Section), sitting as a Chamber
composed of:
Nicolas Bratza, President,
Lech
Garlicki,
Giovanni Bonello,
Ljiljana
Mijović,
Ján Šikuta,
Päivi
Hirvelä,
Mihai Poalelungi, judges,
and
Lawrence Early,
Section Registrar,
Having
deliberated in private on 26 May 2009,
Delivers
the following judgment, which was adopted on that date:
PROCEDURE
- The
case originated in an application (no. 13079/03) against the Republic
of Finland lodged with the Court under Article 34 of the Convention
for the Protection of Human Rights and Fundamental Freedoms (“the
Convention”) by a Finnish national, Mr Jukka Ruotsalainen (“the
applicant”), on 16 April 2003.
- The
applicant, who had been granted legal aid, was represented by Mr M.
Talviaro, a lawyer practising in Kokkola. The Finnish Government
(“the Government”) were represented by their Agent, Mr
Arto Kosonen of the Ministry for Foreign Affairs.
- The
applicant alleged, in particular, that the imposition of a fuel fee
debit after he had been fined for petty tax fraud constituted double
jeopardy in breach of Article 4 of Protocol No. 7.
- On
23 August 2005 the President of the Fourth Section decided to give
notice of the application to the Government. It was also decided to
examine the merits of the application at the same time as its
admissibility (Article 29 § 3).
THE FACTS
I. THE CIRCUMSTANCES OF THE CASE
- The
applicant was born in 1969 and lives in Lapinlahti.
- While
driving his pickup van on 17 January 2001, the applicant was stopped
by the police during a road check. The police discovered a more
leniently taxed fuel than diesel oil in the tank of the van.
- On
26 February 2001 the applicant was fined for petty tax fraud through
a summary penal order. The form stated, inter alia, that:
“Misdemeanour, modus operandi:
Petty tax fraud (motor vehicle tax misdemeanour). [The
applicant] used as fuel in his car fuel more leniently taxed than
diesel oil without having paid due additional tax (lisävero,
tilläggsskatt).
Footnote: he had carried out the refuelling himself”
The
fine amounted to 720 Finnish marks (FIM; 121 euros (EUR)). The
summary penal order indicated that Chapter 29, Article 3, of the
Penal Code (rikoslaki, strafflagen; Act no. 769/1990) and
sections 20 and 33 of the Motor Vehicle Tax Act (laki
moottoriajoneuvoverosta, lagen om skatt på motorfordon; Act
no. 722/1966, now repealed) had been applied. As the applicant did
not contest the imposition of the fine, it became final on 6 March
2001.
- In
separate proceedings, and having received the applicant's submission
in writing on an unspecified date, on 17 September 2001 the Vehicle
Administration (ajoneuvohallintokeskus,
fordonsförvaltningscentralen) issued the applicant with a
fuel fee debit amounting to FIM 90,000 (equivalent to EUR 15,137) on
the ground that his pickup van had been run on more leniently taxed
fuel than diesel oil and without prior notification to the Vehicle
Administration or Customs. The decision indicated that sections 2-7
of the Fuel Fee Act (laki polttoainemaksusta; lagen
om bränsleavgift;
Act no. 337/1993, now repealed)
had been applied. The decision also included instructions on how to
appeal against it and how to apply for a reduction of the imposed
amount.
- The
applicant lodged both an application for a reduction of the fee and
an appeal with a view to having the decision overturned, arguing,
inter alia, that the fuel fee should have been claimed at the
same time as the summary penal order was issued. As it had not been
claimed at that time, it was no longer possible to debit the fuel fee
in the light of Article 7 of the Convention.
- On
10 October 2001 the National Board of Taxes (verohallitus,
skattestyrelsen) rejected the application for a reduction of the
fee. It reasoned:
“No special reasons provided for by law to grant a
relief have been put forward.”
- The
decision indicated that section 15 of the Fuel Fee Act had been
applied. No appeal lay.
- The
Helsinki Administrative Court (hallinto-oikeus,
förvaltningsdomstolen), having received the Tax Ombudsman's
(veroasiamies, skatteombudet) and the Vehicle Administration's
observations and the applicant's observations in reply, on 28 August
2002, rejected the appeal. It reasoned:
“Section 4 of the Fuel Fee Act provides that a
fuel fee (polttoainemaksu, bränsleavgift) is collected
for the number of days the vehicle has been continuously located in
Finland prior to the noted use, but not for more than 20 days at a
time. Section 5 provides that the fuel fee for a pickup van is FIM
1,500 [some EUR 252] per diem. Section 6 provides that if the
use of more leniently taxed fuel than diesel oil is discovered in a
vehicle in respect of which no prior notice has been given, the fuel
fee collected is treble the [normal] amount.
The pickup van owned by Pertti Jukka Tapio Ruotsalainen,
[registration no.] KJM-327, has been noted to have been used during
the year 2001 using fuel more leniently taxed than diesel oil.
Ruotsalainen had not informed the Vehicle Administration or the
Customs thereof [in advance]. In the pre-trial investigation and in
his writ of appeal he has conceded that he has used incorrect fuel in
his vehicle.
The imposition of a fuel fee in an administrative
procedure concerns the imposition of a fee comparable to a tax. What
is in issue is not the imposition of a criminal punishment or a
sanction in lieu.
The imposition of a fuel fee ... is not in breach of the
Constitution of Finland or the Convention.
Despite the reasons for the use submitted by
Ruotsalainen and despite his financial status, the Vehicle
Administration was entitled to impose a fuel fee. The fuel fee
amounts to FIM 1,500 per diem, it was to be imposed in respect
of 20 days and it was to be trebled. The fuel fee FIM 90,000 has been
imposed in accordance with the law. There is no reason to amend the
debiting decision.”
- The
decision indicated that sections 1, 3, 7 and 15 of the Fuel Fee Act
and Article 7 of the Convention and Article 1 of Protocol No. 1 to
the Convention had been applied.
- The
applicant requested leave to appeal, alleging a breach of Article 4
of Protocol No. 7.
- On
26 February 2003 the Supreme Administrative Court (korkein
hallinto-oikeus, högsta förvaltningsdomstolen)
refused leave to appeal.
II. RELEVANT DOMESTIC LAW AND PRACTICE
- The
Finnish system relating to the use as motor fuel of more leniently
taxed oil than diesel oil is based on two main elements. First, the
owners or users of motor vehicles are obliged to give prior notice to
the authorities of their intention to use such fuel as motor fuel and
to pay additional tax (section 20 of the Motor Vehicle Tax Act, which
has since been repealed) and/or a fuel fee (section 1 of the Fuel Fee
Act as amended by Act no. 234/1998). Second, the authorities ensure
compliance with those conditions by means of road checks. Tax evasion
or attempt thereto was punishable under the Penal Code and a failure
to comply with the notification obligation was punishable as a motor
vehicle tax offence (section 33 of the Motor Vehicle Tax Act).
- The
Fuel Fee Act's provisions of interest for the present case read:
“Section 2 - Fuel fee
A vehicle referred to in section 1 shall be subject to a
fuel fee as a tax corresponding to fuel tax, if a more leniently
taxed fuel than diesel oil is used in the vehicle. A fuel fee shall
not be collected on the fuel contained in the tank of a vehicle when
the vehicle is imported. A fuel fee shall, however, be collected, if
the fuel contained in the tank of the imported vehicle has been made
identifiable as provided by virtue of the Excise Duty on Fuels Act
(Act no. 948/82). A vehicle in respect of which a notification within
the meaning of section 20 of the Motor Vehicle Tax Act has been given
for collecting additional tax shall not be subject to a fuel fee
during the tax period of the additional tax.
Section 3 - Notification obligation
If a more leniently taxed fuel than diesel oil is used
in a vehicle referred to in section 1, the owner or holder of
the vehicle shall be obliged to notify the Vehicle Administration of
such use before using it. In respect of a vehicle imported to
Finland, the notification may also be given to the customs
authorities.
Section 4 - Imposition of a fuel fee
A fuel fee shall be collected for the number of days on
which, according to a notification, a more leniently taxed fuel than
diesel oil is used in a motor vehicle.
If the use of a more leniently taxed fuel than diesel
oil is discovered in a vehicle during a time in respect of which no
prior notification has been given, a fuel fee shall be collected for
the number of days on which the vehicle has been continuously located
in Finland prior to the use, but not for more than 20 days at a time.
If a fuel fee has been imposed on the vehicle, the time shall be
counted from the first day following the previous tax period at the
earliest. If the date of importing the vehicle to Finland cannot be
established, the fuel fee shall be collected for a minimum of
10 days.
Section 5 – The amount of the fuel fee
The fuel fee for a pickup van is FIM 1,500 [equivalent
to EUR 252.28] per diem. ...
Section 6 - Increase of the fuel fee
If the use of a more leniently taxed fuel than diesel
oil is discovered in a vehicle in respect of which no prior
notification laid down by section 3 has been given, the fuel fee
collected shall be three times the normal amount.
Section 7 - Party liable for payment
The fuel fee shall be collected from the person who was
the owner of the vehicle at the time when a more leniently taxed fuel
than diesel oil was used in the vehicle. If another person holds the
vehicle permanently in his or her possession, the fuel fee shall be
collected from this holder. ...
...
Section 9 - Establishing the use of fuel
The use of a fuel other than diesel oil shall be
presumed if a tank belonging to the fuel system of a vehicle contains
a fuel which has been made identifiable pursuant to the legal
provisions on light fuel oil. A fuel fee shall be collected
irrespective of the amount of such fuel in the vehicle.
...
Section 15 - Tax relief and respite of payment
For particularly weighty reasons, the Ministry of
Finance may, on application and on conditions set by the Ministry,
grant an exemption from the payment of a fuel fee, a penal interest
and an arrears payment, and an interest due because of respite of
payment.
The National Board of Taxes shall make a decision on the
application referred to in subsection 1, if the sum whose removal or
return is requested does not exceed FIM 300 000 [equivalent to
EUR 16,818.79]. The Ministry of Finance may, however, take the case
up for decision, if it is of particular significance.
The National Board of Taxes may, on application, grant
respite of the payment of a fuel fee. The provisions on the
additional tax on the motor vehicle tax shall apply to the conditions
of such respite. The Ministry of Finance may take a case concerning
respite of payment up for decision. In such cases, the Ministry shall
determine the respite conditions in its decision concerning the
application.
A decision made by virtue of this section shall not be
subject to appeal.
Section 16 - Penal provisions
Illegal evasion of a fuel fee and attempted such evasion
are punishable according to Chapter 29, Articles 1-3, of the Penal
Code.”
- According
to the Government Bill for the enactment of the Fuel Fee Act and
amendment of section 6 of the Excise Duty on Fuels Act and section 16
of the Motor Vehicle Tax Act (no. HE 329/1992), the fuel fee is
intended to correspond to the fuel tax which would have accrued if
diesel oil had been used as fuel in the vehicle.
- The
Government Bills (nos. HE 329/1992 vp, HE 234/1998 vp) note that
section 4 of the Fuel Fee Act is based on the presumption that the
same fuel is used in the vehicle continuously. Since it is usually
impossible to provide evidence of the type of fuel used in the
vehicle before it is observed by the authorities, or to provide
evidence of the extent to which the vehicle has been used, the
imposition of the fuel fee has to be based on the time during which
the vehicle has been used in Finland. For reasons of equity, however,
the period is restricted to 20 days at a time.
- With
regard to section 15 the Government submitted that in most cases
where a tax appeal is pending, the National Board of Taxes refuses
tax relief. This also concerns the application of section 15 of the
Fuel Fee Act. If an application for tax modification has been
rejected for this or another reason, the applicant may,
notwithstanding the existing decision, file a new modification
application with the same authority after the decision on taxation
has become final. The Government did not refer to any such decision.
- The
Fuel Fee Act in force at the relevant time was replaced by a new Fuel
Fee Act (Act no. 1280/2003, with effect from 1 January 2004,
which was not therefore applicable to the present case). Section 3
provides that a fuel fee is imposed for the purpose of preventing the
use of a fuel which gives rise to the imposition of a fuel fee and
that the use in vehicles of a fuel which gives rise to imposition of
a fuel fee is prohibited. Section 9 lays down the sums of the fuel
fees imposed on different types of cars. Section 10 provides that if
a notification has not been made to the competent authority, the fuel
fee shall be increased by 30% at most. The fuel fee may also be
increased by 50% at most, if the act of using the fuel which gives
rise to imposing the fuel fee is repeated or doubled at most, if the
act of using the fuel which gives rise to imposing the fuel fee is
particularly aggravated.
- The
Government Bill for the enactment of the new Fuel Fee Act
(HE 112/2003, p. 7) noted that the use of more leniently taxed
fuel led to the issuing of a fuel fee debit and an additional motor
vehicle tax and that the aim of this was to prevent efficiently the
use of fuel other than fuel intended for traffic. Formally, the use
of more leniently taxed fuel was not forbidden but it was subject to
fairly severe financial sanctions. The basic structure of the Fuel
Fee Act and the Motor Vehicle Tax Act was identical to, for example,
the Penal Code, which does not specifically forbid certain unwanted
acts but only provides for the consequences of such acts. The only
difference was that the sanction applicable to use of fuels was an
administrative sanction collected as a tax. The basic aim of the
provisions on additional tax and fuel fee is well established in
Finland. The provisions are well-known among motorists and also the
level of consequences works in favour of the fact that, when compared
internationally, more leniently taxed fuel is hardly ever used in
road traffic in Finland. The Government Bill considered that the high
level of the fuel fee was necessary with regard to the preventive
effect of the sanctions system.
- Chapter
29, Articles 1-3, of the Penal Code provide:
“Article 1 - Tax fraud (Act no. 1228/1997)
A person who
(1) gives a taxation authority false information on a
fact that influences the assessment of tax,
(2) files a tax return concealing a fact that influences
the assessment of tax,
(3) for the purpose of avoiding tax, fails to observe a
duty pertaining to taxation, influencing the assessment of tax, or
(4) acts otherwise fraudulently,
and thereby causes or attempts to cause a tax not to be
assessed, a tax to be assessed too low or a tax to be unduly
refunded, shall be sentenced for tax fraud to a fine or to
imprisonment for at most two years.
Article 2 - Aggravated tax fraud (Act no. 769/1990)
If in the tax fraud
(1) considerable financial benefit is sought or
(2) the offence is committed in a particularly
methodical manner and the tax fraud is aggravated also when assessed
as a whole, the offender shall be sentenced for aggravated tax fraud
to imprisonment for at least four months and at most four years.
Article 3 - Petty tax fraud (Act no. 769/1990)
(1) If the tax fraud, when assessed as a whole, with due
consideration to the amount of financial benefit sought and the other
circumstances connected with the offence, is to be deemed petty, the
offender shall be sentenced for petty tax fraud to a fine.
(2) If a punitive tax increase is deemed a sufficient
sanction, the report of, prosecution for or punishment for petty tax
fraud may be waived.”
THE LAW
I. ALLEGED VIOLATION OF ARTICLE 4 OF PROTOCOL No. 7 TO THE
CONVENTION
- The
applicant complained under Article 4 of Protocol No. 7 to the
Convention that he had been punished twice for the same offence.
Article
4 of Protocol No. 7 to the Convention reads as follows:
“1. No one shall be liable to be tried
or punished again in criminal proceedings under the jurisdiction of
the same State for an offence for which he has already been finally
acquitted or convicted in accordance with the law and penal procedure
of that State.
2. The provisions of the preceding paragraph
shall not prevent the reopening of the case in accordance with the
law and penal procedure of the State concerned, if there is evidence
of new or newly discovered facts, or if there has been a fundamental
defect in the previous proceedings, which could affect the outcome of
the case.
3. No derogation from this Article shall be
made under Article 15 of the Convention.”
- The
Government contested that argument.
A. Admissibility
- The Court notes that this complaint is not manifestly
ill-founded within the meaning of Article 35 § 3 of the
Convention. It further notes that it is not inadmissible on any other
grounds. It must therefore be declared admissible.
B. Merits
1. The parties' submissions
- The
applicant argued that what was in issue was one single offence or
violation of a single object of legal protection. The principal
purpose of the fuel fee was to ensure that more leniently taxed fuel
than diesel oil was not used in diesel vehicles. The fuel fee alone
had no fiscal purpose. He could have used a more leniently taxed fuel
by notifying the authorities of such use and by paying a daily fee
amounting to some EUR 252. However, it had not been possible to drive
the pickup van during a single day such a distance as to make the use
of such fuel financially viable. The result of the failure to give
prior notice had been that the applicant had been considered to have
used more leniently taxed fuel for a period of twenty days although
his statement that the use involved one fill-up of the fuel tank had
not been proved wrong. The consequences were out of all proportion
and unreasonable taking into consideration even the absolute benefit
sought through the offence, that is, the difference in price between
fuel taxed as diesel oil and more leniently taxed fuel, the
reprehensibility and unique nature of the act, the financial position
and actions of the offender and other circumstances. The applicant's
application for exemption from payment of the fuel fee or a decrease
thereof had been unsuccessful. Although the increased fuel fee was
characterised as an administrative sanction, it should be equated
with a criminal sanction.
- The
applicant considered that the prohibition on the use of more
leniently taxed fuel had technically been in existence even prior to
the entry into force in 2004 of the new Fuel Fee Act. Legislation
provided for a high fuel fee so as to render the actual use of such
fuel impossible. In practice, few notifications were made of the use
of more leniently taxed fuel oil in cars and vans. A prohibition on
the use of light fuel oil had not even been proposed in the
Government Bill for the enactment of the new Fuel Fee Act. It was
only added to the Bill during consideration in the Finance Committee
(report no. 37/2003 vp). This demonstrated that the State had long
held that the notification procedure including sanctions was
sufficient to prevent the use of more leniently taxed fuel in diesel
vehicles. The applicant took the view that the essential elements of
the punishable offence were identical in the provision on petty tax
fraud and in the Fuel Fee Act. Likewise, the administrative fuel fee
and the penal sanction resulting from petty tax fraud were imposed
for one and the same act. Under the wording of sections 3-4 and 6 of
the Fuel Fee Act, the fuel fee was imposed for failure to observe the
notification obligation. According to the essential elements of tax
evasion in the Penal Code, a person who for the purpose of avoiding
tax fails to observe a duty pertaining to taxation or influencing the
assessment of tax shall be sentenced for tax fraud. The use of the
more leniently taxed fuel would have been permissible subject to
payment of a daily fee. The increased fuel fee was imposed for the
failure to submit a prior notification. It was for precisely the same
reason, that is the failure to observe the notification obligation,
that the fine had been imposed. The fuel fee had thus not been
imposed because the use of more leniently taxed fuel was prohibited
as such. The fact of the fuel fee being imposed irrespective of
intent or negligence only served to underscore the citizens' need for
judicial relief and it did not change the essentially criminal nature
of the fuel fee. The Fuel Fee Act and the Penal Code had the same
structure, a stand which was also taken in the Government Bill for
the enactment of the new Fuel Fee Act.
- The
applicant submitted that he had been punished for petty tax fraud on
the ground that he had failed to give a notification in advance. In
practice, the owner or holder of a vehicle cannot be unaware of the
type of fuel used in that vehicle. In theory, the fuel tank of a
vehicle could be filled with more leniently taxed fuel during
unauthorised use. Any occurrence of such a scenario would again only
underscore the need of citizens for judicial relief. In the case of
Västberga Taxi Aktiebolag and Vulic v. Sweden, no.
36985/97, 23 July 2002) the Court held that the question of whether a
tax or tax surcharge could be converted into a prison sentence was
not decisive for the classification of an offence as “criminal”.
The characterisation in Finland of the current fuel fee as an
administrative sanction and the fact of appeals against it being
examined by an administrative court had no relevance to the case.
- The
applicant argued that his case was distinguishable from the case of
Ponsetti and Chesnel v. France (dec.) (nos. 36855/97 and
41731/98, ECHR 1999 VI) which involved the failure to file tax
returns, whereas the present case involved a failure to file a prior
notification. In the former case the tax consequence was based on
accounts, that is, the amount of tax actually evaded. In the present
case, the amount of tax actually evaded had not been established but
it seemed indisputable that the fuel fee significantly exceeded the
amount of tax actually evaded. In the case of Ponsetti and
Chesnel, interest on arrears and tax surcharge amounted to
40—80%. In the present case, the tax was increased by 300%. The
former case involved chronic and repeated failure whereas the present
case involved a single instance of failure of short duration. In the
former case, the essential elements of tax fraud differed from those
of failure to file tax returns in a timely fashion whereas in the
present case the essential elements of tax fraud and failure to
notify were the same. Moreover, the acts in the present case were
congruous.
- The
Government submitted that the aim of the Fuel Fee Act in force at the
relevant time was to ensure that the State would in all
circumstances, in respect of diesel vehicles, obtain at least the
same amount of tax that accrued from the use of diesel oil instead of
the generally available and more leniently taxed light fuel oil. The
primary purpose of the legislation was to ensure the use of diesel
oil in diesel vehicles. At that time, the legislation did not contain
any formal prohibition on the use of more leniently taxed fuel and
therefore it was necessary to make the use of such fuel financially
less advantageous than the use of diesel oil. This was ensured by
providing for a high flat-rate tax (the fuel fee). Although the use
of a more leniently taxed fuel was not prohibited, anyone who used
such fuel was obliged to give prior notification. The fee was imposed
irrespective of whether the person in question defaulted on the
notification obligation intentionally or through carelessness since
this guaranteed the State's tax income irrespective of how the
conduct of the tax payer was assessed. The amount of the fuel fee
depended solely on the vehicle type. A failure to comply with the
notification obligation resulted in the fuel fee's being collected
threefold. Furthermore, a fuel fee could only be reduced in
individual cases for particular reasons. Although the increased fuel
fee had the nature of an administrative sanction, its main objective
was to collect tax revenue and to safeguard the operation of the fuel
taxation system. According to the new Fuel Fee Act, the fuel fee is,
unlike before, a sanction for a violation of a prohibition laid down
in the Act. However, the purpose of the fee remains unchanged, that
is, it is to ensure an appropriate accrual of tax revenue.
- The
Government submitted that petty tax fraud was an offence under the
Penal Code punishable in criminal proceedings by a fine (the amount
of the day-fine being dependent on the income and assets of the
person concerned). Failure to pay a fine resulted in its being
converted to a prison sentence. The increased fuel fee was not a
penal sanction but an administrative one, imposed in an
administrative procedure and could not, therefore, be equated to a
determination of a criminal charge against the applicant. This was
also reflected in the new Fuel Fee Act, which contained an express
prohibition on the of use light fuel oil. This change to the
legislation resulted from the judgment of the European Court of
Justice of 27 November 2003 concerning Finland (Case C-185/00:
Commission of the European Communities v. Republic of Finland)
in which the European Court of Justice deemed that Community
legislation obliged Finland to amend its legislation so as to ensure,
more efficiently than before, that fuels were used in compliance with
fuel directives (see Council
Directive 92/81/EEC on the harmonisation of the structures of excise
duties on mineral oils
and Council Directive
92/82/EEC on the approximation of the rates of excise duties on
mineral oils, both
replaced by Council Directive 2003/96/EC of 27 October 2003
restructuring the Community framework for the taxation of energy
products and electricity). As to the applicant's view that the
prohibition on the use of more leniently taxed fuel had technically
been in existence also before the amendment, the Government submitted
that it was indeed true that the rate of the fuel fee was so high
that its payment was disadvantageous even if the person concerned
only had to pay the basic amount. However, in the above mentioned
judgment it had been found that Finland had failed to fulfil its
obligations under Community law. Thus, the prohibition on the use of
more leniently taxed fuel and the fact that the sanction for the use
of wrong fuel was severe, have been found to constitute different
legal issues. As to the applicant's submission that the State had
long held that the notification procedure inclusive of sanctions was
sufficient to prevent the use of more leniently taxed fuel in diesel
vehicles, the Government submitted that this was true, and that this
fact had also been relied on before the European Court of Justice.
However, it did not render the fuel fee a criminal law sanction nor a
sanction of a comparable nature, as its aim was specifically to
ensure the accrual of tax revenue, primarily by ensuring the use of
taxable diesel oil in vehicles and secondarily by corresponding at
least to the tax difference between the different fuels.
- The
Government argued that although the increased fuel fee could be
considered quite substantial, the essential elements of the acts
leading to its imposition on the one hand and a punishment for petty
tax fraud on the other, differed significantly from each other and
did not constitute one and the same act on the following grounds.
Firstly, the administrative fuel fee was imposed for using a fuel
that was taxed more leniently than diesel oil whereas the criminal
sanction for petty tax fraud was imposed for illegal evasion of the
fuel fee, the punishable act being the failure to comply with the
notification obligation laid down in the Fuel Fee Act. Thus, the
administrative fuel fee and the criminal sanction for petty tax fraud
were imposed for different acts. Secondly, the sanction provided for
in the Penal Code always necessitated intent or at least negligence,
and petty tax fraud was always intentional and thus essentially
involved a subjective element. By contrast, the fuel fee was imposed
irrespective of the degree of intent on the basis of the mere
objective fact that the fuel system of a vehicle contained the wrong
fuel. Thirdly, the purpose of the criminal sanction for tax fraud was
to constitute a punishment and to express moral reproach for a
certain act. The fuel fee did not have a similar purpose of
punishment or reproach. It was only intended to ensure the accrual of
tax revenue, primarily by ensuring the use of taxable diesel oil in
vehicles and secondarily by corresponding at least to the tax
difference between the different fuels. Moreover, the increase of the
fuel fee was not intended to be a punishment, but only to ensure that
vehicle users gave prior notification if they wanted to use a more
leniently taxed fuel. Fourthly, the fuel fee system in force at the
relevant time also differed from a punishment in that it made it
legally possible for vehicle owners to choose to use a tax-free fuel,
to notify the authorities of this and to pay the fuel fee, an option
which was not open in respect of acts regulated by criminal law.
Fifthly, only a perpetrator or an accomplice comparable with the
perpetrator may be sentenced to a sanction under criminal law.
Emphasis should be put on the fact that owners or holders of a
vehicle must pay the fuel fee irrespective of whether they use the
fuel concerned. Sixthly, an unpaid fine may be converted to
imprisonment whereas an unpaid fuel fee cannot. Seventhly, criminal
cases were examined by general courts whereas cases concerning fuel
fees were examined in an administrative procedure, like tax cases,
and finally through an appeal to an administrative court.
- The
Government argued that the present case was similar to the case of
Ponsetti and Chesnel (cited above) in that the constitutive
elements of tax fraud and those of the failure to make the
returns within the prescribed period (“the fiscal offence”)
were different. The cases were also similar in that the tax fraud
included the element of “wilfulness” whereas the “fiscal
offence” was possible on solely objective grounds. On the other
hand, when compared to the aforementioned case, it may be noted that
in respect of the fuel fee in the present case, the acts underlying
the sanctions are even more clearly composed of different elements
than the acts giving rise to a tax penalty as the fuel fee may, on
the conditions mentioned in the foregoing, be imposed even if there
has been no intention of tax evasion.
- Should
the Court find it necessary to examine whether some of the exceptions
mentioned in Article 4 § 2 of the Protocol No. 7 would have been
applicable to the said procedures, the Government took the view that
none of these exceptions was applicable to the present case.
- As
to the applicant's view that the structure of the Fuel Fee Act and
the Penal Code was the same, it was true that at the relevant time,
the Fuel Fee Act did not contain a prohibition on the use of more
leniently taxed fuel, in the same way as the Penal Code did not
explicitly prohibit the commission of acts that were punishable under
it. This common feature was also referred to in the Government Bill
(112/2003) for the enactment of the new Fuel Fee Act. However, the
purpose of the reference was only to indicate that the fuel fee must
be considered an effective means of ensuring the collection of fuel
tax or of a corresponding amount of taxes, irrespective of whether
the fuel fee was based on a prohibition of use. A further reason for
the inclusion of the aforementioned comparison of the Fuel Fee Act
with the Penal Code was the case pending before the European Court of
Justice. The purpose was only to indicate that the objectives of
legislation may be achieved even if not based on a prohibition. Thus,
the applicant's quotation was irrelevant in relation to the present
case.
- The
Government argued that, had the applicant notified the use, the
question of tax fraud could not have been raised since there would
have been no tax evasion. Thus, the applicant's conduct would not
have been reprehensible as required for the application of criminal
law sanctions. At the relevant time, it was in accordance with the
law to pay the fuel fee and then start using more leniently taxed
fuel. Whether this was financially viable was an entirely different
issue.
- The
Government reiterated that the administrative fuel fee and the
criminal sanction for petty tax fraud were not imposed for similar
acts. The fuel fee was imposed for using a fuel that was taxed more
leniently than diesel oil. The criminal sanction, by contrast, was
imposed for illegal evasion of the fuel fee, the punishable act being
the failure to comply with the notification obligation laid down in
the Fuel Fee Act. The fact that a criminal sanction may only be
imposed on a person who had committed a criminal act, and that the
fuel fee was imposed on the owner or holder of the vehicle, was an
essential difference between administrative and criminal sanctions.
The applicant's allegation to the effect that in practice the owner
or holder of a vehicle cannot be unaware of the type of fuel used in
that vehicle, was not true, for example in respect of vehicles owned
by employer companies. Furthermore, whether the owner or holder of
the vehicle was aware of the type of fuel had essentially different
relevance in administrative and criminal proceedings.
- As
to the fact that in the case of Ponsetti and Chesnel the tax
consequence imposed was based on tax actually evaded, which was not
the case in the present application, the Government submitted that
this difference was due to differences in the applicable forms of
taxation. The fuel fee was not dependent on income and nor could the
amounts of fuel used in individual vehicles be taken into account in
the imposition of the fee for practical reasons.
- The
Government further emphasised that the duration of the reprehensible
conduct should not be of relevance considering, in particular, that
there could be no evidence of what type of fuel had been used in the
vehicle at times other than the moment when the person concerned was
caught using the wrong type of fuel.
2. The Court's assessment
A. Whether the sanctions were criminal in
nature
- The
aim of Article 4 § 1 of Protocol No. 7 is to prohibit the
repetition of criminal proceedings that have been concluded by a
final decision. In the case under consideration two measures were
imposed on the applicant in two separate and consecutive sets of
proceedings. On 26 February 2001 the applicant was fined in
summary penal order proceedings and on 17 September 2001 the
applicant was issued with a fuel fee debit in administrative
proceedings.
- The
Court reiterates that the legal characterisation of the procedure
under national law cannot be the sole criterion of relevance for the
applicability of the principle of non bis in idem under
Article 4 § 1 of Protocol No. 7. Otherwise, the application of
this provision would be left to the discretion of the Contracting
States to a degree that might lead to results incompatible with the
object and purpose of the Convention (see, most recently, Storbråten
v. Norway (dec.), no. 12277/04,
ECHR 2007 ... (extracts), with further
references). The notion of “penal procedure” in the text
of Article 4 of Protocol No. 7 must be interpreted in the light of
the general principles concerning the corresponding words “criminal
charge” and “penalty” in Articles 6 and 7 of the
Convention respectively (see Haarvig v. Norway (dec.), no.
11187/05, 11 December 2007; Rosenquist v. Sweden (dec.),
no. 60619/00, 14 September 2004; Manasson v. Sweden (dec.),
no. 41265/98, 8 April 2003; Göktan v. France,
no. 33402/96, § 48, ECHR 2002-V; Malige v. France,
23 September 1998, § 35, Reports 1998 VII; and
Nilsson v. Sweden (dec.), no. 73661/01, ECHR 2005 ...).
- The Court's established case-law sets out three
criteria, commonly known as the “Engel criteria”
(see Engel and Others v. the Netherlands, 8 June 1976,
Series A no. 22), to be considered in determining whether or not
there was a “criminal charge”. The first criterion is the
legal classification of the offence under national law, the second is
the very nature of the offence and the third is the degree of
severity of the penalty that the person concerned risks incurring.
The second and third criteria are alternative and not necessarily
cumulative. It is enough that the offence in question is by its
nature to be regarded as criminal or that the offence renders the
person liable to a penalty which by its nature and degree of severity
belongs in the general criminal sphere (see Ezeh and Connors v.
the United Kingdom [GC], nos. 39665/98 and 40086/98, §
86, ECHR 2003 X). The relative lack of seriousness of the
penalty cannot divest an offence of its inherently criminal character
(see Öztürk v. Germany, judgment of 21 February
1984, Series A no. 73, § 54; also Lutz v. Germany,
judgment of 25 August 1987, Series A no. 123, § 55). This does
not exclude a cumulative approach where separate analysis of each
criterion does not make it possible to reach a clear conclusion as to
the existence of a criminal charge (see, as recent authorities,
Jussila v. Finland [GC], no. 73053/01, §§ 30-31,
ECHR 2006 ..., and Ezeh and Connors, cited above,
§ 82-86).
- As
noted above, first, the applicant was fined in summary penal order
proceedings because he had used more leniently taxed fuel than diesel
oil in the tank of his vehicle, which constituted petty tax fraud.
The proceedings were “criminal” according to the Finnish
legal classification. Those proceedings were “criminal”
also for the purposes of Article 4 of Protocol No. 7 and consequently
the applicant was “finally acquitted or convicted in accordance
with the law and penal procedure of [the] State”. The guarantee
of Article 4 of Protocol No. 7 comes into play where a new set of
proceedings is instituted after the previous acquittal or conviction
has acquired the force of res judicata. In this case, the
applicant did not appeal against the summary penal order, which
therefore became res judicata.
- Subsequently,
the applicant was issued with a fuel fee debit in administrative
proceedings. Turning to the first of the Engel criteria, it is
apparent that the fuel fee debit was not classified as criminal but
as part of the fiscal regime (see paragraph 12 above). This is
however not decisive. In this connection, the Court has previously
found that the sphere defined in the Finnish legal system as
“administrative” embraces certain offences that have a
criminal connotation but are too trivial to be governed by criminal
law and procedure (see Jussila v. Finland [GC], cited above, §
38).
- The
second criterion, the nature of the offence, is the more important.
The Court observes that the relevant provision of the Fuel Fee Act
was directed towards all citizens rather than towards a group
possessing a special status. The applicant was liable in his capacity
as owner or user of a diesel engine vehicle. As to the Government's
argument that the fuel fee debit was intended as pecuniary
compensation for damage, the Court is however not so convinced in the
circumstances of the present case. It may well be that the fuel fee
imposed corresponded to the damage caused, namely loss of revenue. It
is however to be noted that the fuel fee collected was trebled. This
must in the Court's view be seen as a punishment to deter
re-offending, recognised as a characteristic feature of criminal
penalties (see Ezeh, §§ 102 and 105). It may
therefore be concluded that the fuel fee debit was imposed by a rule
whose purpose was not only compensatory but also deterrent and
punitive. The Court considers that this establishes the criminal
nature of the offence.
- In
the light of the above considerations the Court concludes that the
nature of the offence was such as to bring the issuing of the fuel
fee debit on 17 September 2001 within the ambit of “penal
procedure” for the purposes of Article 4 of Protocol No. 7.
B. Whether the latter sanction arose from
the same facts as the former and whether there was a duplication of
proceedings
- In
the case of Sergey Zolotukhin v. Russia [GC] (no. 14939/03,
§§ 70-78, 10 February 2009) the Court observed that
the body of case-law that had been accumulated throughout the history
of application of Article 4 of Protocol No. 7 by the Court
demonstrated the existence of several approaches to the question of
whether the offences for which an applicant was prosecuted were the
same. Seeking to put an end to this legal uncertainty the Court
decided to provide a harmonised interpretation of the notion of the
“same offences” – the idem element of the
non bis in idem principle.
- In
the afore-mentioned case (§ 82) the Court took the view
that Article 4 of Protocol No. 7 must be understood as
prohibiting the prosecution or trial of a second “offence”
in so far as it arises from identical facts or facts which are
substantially the same.
- Turning
to the present case, the Court will examine whether the subsequent
issuing of the fuel fee debit arose from the same facts as the fine
(idem) and whether there was a duplication of proceedings
(bis).The Court notes that the statement of the facts in the
decisions by which the “penal procedures” were concluded
are an appropriate starting point for its determination of the issue
of whether the facts in both proceedings were identical or
substantially the same. The Court's inquiry should therefore focus on
those facts which constitute a set of concrete factual circumstances
involving the same defendant and inextricably linked in time and
space.
- The
Court will begin its analysis of the circumstances in the instant
case by reviewing the events of 17 January 2001 and the fine imposed
and the fuel fee levied on the applicant. On 26 February 2001 the
applicant was fined under Chapter 29, Article 3, of the Penal Code
and sections 20 and 33 of the Motor Vehicle Tax Act for petty tax
fraud or, more precisely, a motor vehicle tax offence. Although the
summary penal order contained only two sentences relevant to the
establishment of the facts it transpires that the fine was issued on
the ground that he had used a more leniently taxed fuel than diesel
oil in the tank of his van without having paid due additional tax and
that he had carried out the refuelling himself (see paragraph 7
above).
- In
the subsequent administrative proceedings the applicant was issued
with a fuel fee debit on the ground that his pickup van had been
noted to have been used during the year 2001 with fuel more leniently
taxed than diesel oil. As he had failed to inform the Vehicle
Administration or the Customs of the use in advance, the fuel fee
collected was to be trebled. The decision also noted that the
applicant had conceded that he had used the wrong fuel in his
vehicle.
- This
recapitulation of the events and sanctions demonstrates that since
the same conduct on the part of the same defendant and within the
same time frame is in issue, the Court is required to verify whether
the facts of the offence for which the applicant was fined and those
of the offence by reason of which he was issued with a fuel fee debit
were identical or substantially the same.
- The
definition of the offences of “tax fraud” and “petty
tax fraud” under Chapter 29, Articles 1 and 3, of the Penal
Code referred to various types of prohibited conduct (see paragraph
23 above). Each of these elements was in itself sufficient for a
finding of guilt. The police must be considered to have based the
summary penal order on the fact that the applicant had “otherwise
acted fraudulently” and thereby caused or attempted to cause a
tax not to be assessed. It was also considered essential that the
applicant had carried out the refuelling himself.
- In
the ensuing administrative proceedings the applicant was issued with
a fuel fee debit on the ground that his car had been run on more
leniently taxed fuel than diesel oil. The fuel fee debit was trebled
on the ground that the applicant had not given prior notice of this
fact. Although the Administrative Court's decision noted that the
applicant had admitted having used the wrong fuel, the imposition of
the fuel fee debit did not require intent on the part of the user of
the wrong fuel.
- To
sum up, the facts that gave rise to the summary penal order against
the applicant related to the fact that he had used more leniently
taxed fuel than diesel oil in his pickup van without having paid
additional tax for the use. The fuel fee debit was imposed because
the applicant's pickup van had been run on more leniently taxed fuel
than diesel oil and it was then trebled because he had not given
prior notice of this fact. This latter factor has above been
considered to have amounted to a punishment to deter re-offending.
Thus, the facts in the two sets of proceedings hardly differ albeit
there was the requirement of intent in the first set of proceedings.
The facts of the two offences must, the Court considers, therefore be
regarded as substantially the same for the purposes of Article 4 of
Protocol No. 7. As the Court has held, the facts of the two offences
serve as its sole point of comparison (see Sergey Zolotukhin v.
Russia [GC], cited above, § 97). Lastly, the Court notes
that the latter proceedings did not fall within the exceptions
envisaged by the second paragraph of the said provision.
- The
foregoing considerations are sufficient to enable the Court to
conclude that there has accordingly been a violation of Article 4 of
Protocol No. 7 to the Convention.
II. ALLEGED VIOLATION OF ARTICLE 6 OF THE CONVENTION
- The
applicant complained that the failure to comply with the non bis
in idem rule also amounted to a violation of Article 6 of the
Convention.
- The
Court notes that that principle is embodied solely in Article 4 of
Protocol No. 7; the other provisions of the Convention do not
guarantee compliance with it either expressly or implicitly (see
Ponsetti and Chesnel v. France (dec.), cited above). It
follows that this part of the application is incompatible ratione
materiae with the provisions of the Convention within the meaning
of Article 35 § 3 and must be rejected in accordance
with Article 35 § 4.
III. APPLICATION OF ARTICLE 41 OF THE CONVENTION
- Article 41 of the Convention provides:
“If the Court finds that there has been a
violation of the Convention or the Protocols thereto, and if the
internal law of the High Contracting Party concerned allows only
partial reparation to be made, the Court shall, if necessary, afford
just satisfaction to the injured party.”
A. Damage
- Under
the head of pecuniary damage the applicant requested that the fuel
fee, inclusive of increases and consequences for default, be voided
in full and that he be reimbursed for any payments made inclusive of
interest and arrears. He did not specify any amounts. Under
the head of non-pecuniary damage the applicant claimed EUR 15,000
for suffering and distress. This amount represented EUR 3,000 for
each year subsequent to the imposition of the fuel fee.
- The
Government considered that the costs relating to the fine amounting
to FIM 729 (EUR 121) could be reimbursed and that the applicant
should be awarded reasonable compensation for non-pecuniary damage
not exceeding EUR 1,000.
- The
Court notes that the applicant has not claimed reimbursement of the
fine amounting to EUR 121. Nor has he shown that he has paid the
trebled fuel fee and it therefore rejects this claim. On the other
hand, the Court awards the applicant EUR 1,500 in respect of
non-pecuniary damage.
B. Costs and expenses
- The
applicant claimed EUR 13,733.60 for the
costs and expenses incurred before the Court.
- The
Government considered the total of 46.6 hours' work (at a rate of EUR
200 plus VAT per hour) excessive. Also, the applicant had not
submitted any invoice concerning the costs of translations. The award
under this head should not exceed EUR 4,500 (inclusive of VAT).
- According
to the Court's case-law, an applicant is entitled to the
reimbursement of costs and expenses only in so far as it has been
shown that these have been actually and necessarily incurred and were
reasonable as to quantum. In the present case, regard being had to
the information in its possession, the above criteria and the legal
aid granted by the Council of Europe, the Court considers it
reasonable to award the sum of EUR 8,000 (inclusive of VAT) for the
proceedings before the Court.
C. Default interest
- The
Court considers it appropriate that the default interest should be
based on the marginal lending rate of the European Central Bank, to
which should be added three percentage points.
FOR THESE REASONS, THE COURT UNANIMOUSLY
- Declares the complaint concerning Article 4
of Protocol No. 7 to the Convention admissible and the remainder of
the application inadmissible;
- Holds that there has been a violation of Article
4 of Protocol No. 7 to the Convention;
- Holds
(a) that
the respondent State is to pay the applicant, within three months
from the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, EUR 1,500 (one
thousand five hundred euros) in respect of non-pecuniary damage, plus
any tax that may be chargeable, and EUR 8,000 (eight thousand euros)
in respect of costs and expenses, plus any tax that may be chargeable
to the applicant;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amounts at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points;
- Dismisses the remainder of the applicant's claim
for just satisfaction.
Done in English, and notified in writing on 16 June 2009, pursuant to
Rule 77 §§ 2 and 3 of the Rules of Court.
Lawrence Early Nicolas Bratza
Registrar President
