European Court of Human Rights

Communicated on 28 August 2014

FIRST SECTION

Application no. 53249/08
Snežana GEROVSKA POPČEVSKA against the former Yugoslav Republic of Macedonia
lodged on 1 November 2008

STATEMENT OF FACTS

The applicant, Ms Snežana Gerovska Popčevska, is a Macedonian national, who was born in 1954 and lives in Skopje. She is represented before the Court by Ms A. Begova, a lawyer practising in Skopje.

A.  The circumstances of the case

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

1.  Background of the case

During the events described below and until 2007, the applicant was a judge at the Skopje Court of First Instance.

At the relevant time there was an obligation for the applicant under the applicable law to report any increase in the applicant’s or her family members’ assets.

On 5 November 2004 a sum of 38,000 euros (EUR) was deposited to the applicant’s personal savings account.

On 8 July 2006 the applicant reported a change in her state of assets (промена во имотната состојба) to the State Commission for Prevention of Corruption (Државна комисија за спречување на корупцијата) (“the Commission”), namely that she had acquired an apartment worth EUR 45,000. She also reported a debt, namely a bank loan for purchase of an apartment in the amount of 620,000 Macedonian denars (MKD). She further submitted a bank statement attesting that she withdrew EUR 35,000 from her savings account.

2.  Administrative proceedings against the applicant

On an unspecified date, the Commission lodged a request with the Public Revenue Office (Управа за Јавни Приходи) (“the Office”) for examination of the applicant’s state of assets in respect of the funds she had obtained in 2004.

After holding public hearings on 1 and 5 December 2006, by a decision of 26 December 2006 the Office ordered the applicant to pay the amount of MKD 1,627,712 on the ground of unreported and untaxed income. It found that it had not been proven during the proceedings that the amount of EUR 38,000 had been legally acquired by the applicant. It did not find credible the applicant’s and her brother’s statements that her brother had deposited the money to her account as a compensation for her part of the property inherited by their parents, as the applicant had not submitted a contract with her brother in support of that assertion.

The applicant appealed. On 26 December 2006 the Minister of Finance dismissed her appeal. It endorsed the conclusion of the Office that the applicant had not proven that the money in question had been lawfully acquired. The decision stated, inter alia, that:

“...Although in accordance with section 35 of the Prevention of Corruption Act, [the applicant] was obliged to report the change of assets within 30 days, she did not fulfil this statutory obligation. ...

... In deciding, it was taken into account that the appellant had not acted in accordance with section 35 of the Prevention of Corruption Act and had not reported within 30 days the change in assets [made] by the transfer to her account of the amount of EUR 38,000.00 on 5 November 2004. ...”

The applicant lodged an administrative-dispute claim (тужба за управен спор) against the Minister’s decision, seeking that the Supreme Court held a public hearing and that it adduced a financial expert opinion, the latter in order to establish whether the disputed amount of money was unlawfully acquired. She argued that she had indirectly reported the increase of her assets by reporting the acquisition of the apartment in July 2006. She further argued that the deadline of 30 days for reporting the change of assets was introduced in 2006 and that there had been no such deadline at the moment of the increase of her assets in 2004.

On 16 January 2008 the applicant made a written submission to the Administrative Court (which in the meantime had become competent to adjudicate the case) asking that the proceedings were sped up. She reiterated her request for a public hearing, arguing that there had existed no legal positions on the particular issue arising in the case and that it was a complex case which required evidence to be adduced for the sake of correct establishment of the facts. She further requested, pursuant to section 31 of the Administrative Disputes Act (see Relevant domestic law below) that the court allowed her to be assisted at the public hearing by a competent expert – a certified auditor.

On 4 April 2008 the Administrative Court dismissed the applicant’s claim. In its judgment it stated that, in his reply to the applicant’s claim, the Minister reiterated the reasoning given in the impugned decision. The court endorsed the reasoning of the administrative bodies in dismissing the applicant’s and her brother’s statements as regards the way in which the applicant had obtained the money. The court did not specifically address the applicant’s requests for an oral hearing and for a financial expert opinion. In respect of the deadline for reporting the changes of assets, the court quoted section 35 of the 2004 consolidated text of the Prevention of Corruption Act. In the reasoning it stated the following:

“... The court assessed the applicant’s arguments... but it finds them unfounded. This is so because there was an obligation [for her] as an elected public official – a judge, to report this change. Her judicial awareness and conscience obliged her to do that within a reasonable deadline, and that is 30 days, which was determined for submitting the declaration of assets (анкетен лист), at the moment of election or taking up the duty of the public official. ...”

3.  Criminal proceedings against the applicant

On 18 February 2009 the public prosecutor rejected the criminal complaint against the applicant for the offence of “non-disclosure of the origin of disproportionally acquired assets” (прикривање на потеклото на несразмерно стекнат имот). The prosecutor found that the applicant had not concealed the funds, as they had been lawfully transferred from her brother’s savings account to hers on the basis of an oral agreement with her brother as compensation for property inherited by their parents.

On 5 February 2010, upon the applicant’s freedom of information request, the prosecutor’s decision was served on her.

B.  Relevant domestic law

Administrative Disputes Act

Section 30 of the Act, applicable at the material time, provided that the court decided, in principle, at a private session. It could hold a public hearing if the case was complex; in order to clarify the issues; when it established facts and adduced evidence. A party to the proceedings could request the court to hold a public hearing.

Section 31 provided that the party to the administrative-dispute proceedings would be allowed to bring an expert to provide him or her advice on issues related to the subject of the proceedings which required specific expertise.

Prevention of Corruption Act (“the 2002 Act”)

Under section 34, an elected or appointed official, or a responsible person (одговорно лице) of a public institution or enterprise, or another legal entity which deals with state funds, was obliged to report an increase of his or her assets, or the assets of the members of his or her family, such as the construction of a house or other buildings, purchase of immovable property, securities, car or other movable property the value of which exceeds the amount of twenty average salaries in the previous trimester.

Act of 2004 amending the Prevention of Corruption Act (“the 2004 Act”, published in the Official Gazette no. 46/04 of 12 July 2004)

Section 36 provided that proceedings for examination of the state of assets could be initiated against an elected or appointed public official, or a responsible person of a public institution or enterprise, or another legal entity which deals with state funds, if that person did not provide any information of provided false or incomplete information in the declaration of assets, or if he or she did not report a change of assets or provided false or incomplete information when reporting a change of assets.

Under section 37 (which added section 36-a to the Prevention of Corruption Act) if during the proceedings for examination of assets it had not been proven that the assets had been acquired or increased as a result of regular income (редовни примања) which had been reported and taxed, the Office would adopt a tax decision. It would take as taxation base the difference between the established regular, reported and taxed income of the person concerned and the members of his family and the estimated market value of the assets in question. The taxation base so determined would then be subject to a tax rate of 70% of the difference of the taxed and reported income and the market value of the assets.

Consolidated text of the Prevention of Corruption Act (published in the Official Gazette no. 83/04 of 24 November 2004)

Section 34 of the 2002 Act was renumbered as section 35 in the consolidated text.

Act of 2006 amending the Prevention of Corruption Act (“the 2006 Act”, published in the Official Gazette no. 126/06 of 1 December 2006)

Section 12 amending section 34 of the 2002 Act introduced a 30-day deadline for reporting the change of assets.

Act of 2008 amending the Prevention of Corruption Act (“the 2008 Act” published in the Official Gazette no. 10/08 of 21 January 2008)

Section 3 amended section 36-a of the Prevention of Corruption Act, as follows: if during the proceedings for examination of assets it has not been proven that the assets have been acquired or increased as a result of income which had been reported and taxed, the Public Revenue Office will adopt a decision for personal income tax. The tax to the unreported income will be calculated at a 70% rate.

Act of 2001 amending the Personal Income Tax Act

Under section 2 (amending section 12 of the Personal Income Tax Act), there were two personal income tax rates, namely of 15% and 18% of the income.

COMPLAINTS

The applicant complains under Article 6 of the Convention that there was no public hearing before the Administrative Court despite her explicit request and about a violation of the principle of equality of arms, in that the Minister’s reply to her administrative dispute-claim was not served on her and that her proposal for a financial expert opinion was dismissed. She further complains that the domestic authorities applied a provision that had not existed at the moment of the increase of the applicant’s assets.

QUESTIONS TO THE PARTIES

1.  Was Article 6 § 1 of the Convention under its criminal head applicable to the impugned proceedings in the present case? If so, did the applicant have a fair hearing in accordance with Article 6 § 1 of the Convention? In particular,

- has there been an oral hearing in the present case as required by Article 6 § 1 of the Convention?

- were the principles of equality of arms and adversarial hearing respected in view of the applicant’s allegation that the Ministry’s reply to her administrative-dispute claim was not communicated to her?

- was the principle of equality of arms respected by the domestic courts in view of their refusal to admit in evidence the financial expert opinion proposed by the applicant?

3. Was Article 7 of the Convention applicable to the impugned proceedings in the present case? If so, was the relevant domestic law applied retroactively in the applicant’s case, in contravention to Article 7 of the Convention? The Government are invited to provide copies of any relevant domestic case-law concerning the manner in which the relevant domestic law is applied.