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SECOND SECTION

CASE OF AJA v. CROATIA

(Application no. 37462/09)

JUDGMENT

STRASBOURG

4 October 2016

This judgment will become final in the circumstances set out in Article 44
2 of the Convention. It may be subject to editorial revision.
AJA v. CROATIA JUDGMENT 1

In the case of aja v. Croatia,


The European Court of Human Rights (Second Section), sitting as a
Chamber composed of:
Il Karaka, President,
Julia Laffranque,
Neboja Vuini,
Valeriu Grico,
Ksenija Turkovi,
Jon Fridrik Kjlbro,
Georges Ravarani, judges,
and Stanley Naismith, Section Registrar,
Having deliberated in private on 6 September 2016,
Delivers the following judgment, which was adopted on that date:

PROCEDURE
1. The case originated in an application (no. 37462/09) against the
Republic of Croatia lodged with the Court under Article 34 of the
Convention for the Protection of Human Rights and Fundamental Freedoms
(the Convention) by a Croatian national, Mr Miljenko aja (the
applicant), on 5 May 2009.
2. The applicant was represented by Mr P. Krni, an advocate practising
in Slavonski Brod. The Croatian Government (the Government) were
represented by their Agent, Ms . Stanik.
3. The applicant complained that, as a result of a wrong interpretation of
the relevant law, different from the one adopted by the domestic authorities
in other similar cases, he had been convicted of and fined for a customs-
related administrative offence even though he had done nothing illegal.
4. On 24 March 2011 the application was communicated to the
Government.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

5. The applicant was born in 1958 and lives in Prague.


6. The applicant claims to have been living in Prague since
18 November 2000, when the Czech authorities granted him a visa for an
extended stay (a long-term residence permit). On 18 February 2008 the
applicant was granted the right to reside permanently in the Czech Republic
2 AJA v. CROATIA JUDGMENT

(a permanent residence permit). However, he did not de-register his


domicile (prebivalite) in Croatia.
7. On 5 June 2008 the applicant bought a car (a Mercedes S 350 L) in
Germany and on 10 June 2008 he registered it in the Czech Republic in his
name.
8. On 11 June 2008 the applicant entered Croatia in his car. He claimed
that the purpose of his visit was, inter alia, to de-register his domicile in
Croatia.
9. On 15 June 2008 the applicant was stopped by the police in Zagreb
while driving his car. The police authorities, finding it suspicious that a
Croatian national was driving a car with foreign licence plates, impounded
the car and reported the matter to the Customs Administration, suspecting
that the car had been imported into Croatia without payment of the relevant
taxes and that an administrative offence had thus been committed.
10. On 17 June 2008 the applicant de-registered his domicile in Croatia.
11. On 15 September 2008 the applicant re-registered his domicile in
Croatia.

A. The administrative proceedings

1. Principal proceedings
12. Meanwhile, on 16 June 2008 the Customs Administration of the
Ministry of Finance had instituted administrative proceedings (upravni
postupak) with a view to establishing whether the applicant was liable to
pay taxes on the importation of his vehicle and if so, in what amount. On the
same day the Customs Administration had issued a decision impounding the
applicants car, against which the applicant did not appeal.
13. On 11 December 2008 the Customs Administration issued a decision
ordering the applicant to pay, by 30 December 2008, the customs debt
(consisting of the VAT and the special tax on motor vehicles) owed on the
importation of his car, which amounted to 527,747.08 Croatian kunas
(HRK).1
14. The applicant did not appeal against that decision, which thus
became final and enforceable on 3 January 2009.

2. Administrative enforcement proceedings


15. Since the applicant did not pay the above sum, on 23 February 2009
the Customs Administration instituted administrative enforcement
proceedings and issued a decision confiscating his car and ordering its sale
with a view to collecting the above-mentioned customs debt.

1
Approximately 71,251 euros (EUR) at the time.
AJA v. CROATIA JUDGMENT 3

16. By a decision of 5 June 2009 the Ministry of Finance, as the second-


instance administrative authority, dismissed an appeal by the applicant and
upheld the first-instance decision of 23 February 2009.
17. On 6 October 2009 the applicant brought an action in the
Administrative Court (Upravni sud Republike Hrvatske).
18. On 9 May 2012 that court, which in the meantime had become the
High Administrative Court (Visoki upravni sud Republike Hrvatske),
dismissed the applicants action.

B. The administrative offence proceedings

19. In the meantime, on 17 July 2008 the Customs Administration had


also instituted administrative offence proceedings (prekrajni postupak)
against the applicant for importing his car into Croatia without paying the
relevant taxes.
20. On 31 July 2008 the Customs Administration found the applicant
guilty of committing an administrative offence under section 241(1)
subparagraph 10 of the Customs Act (see paragraph 29 below), and fined
him HRK 5,0002. The Customs Administration found that the applicant had
had his domicile in Croatia at the time of the commission of the offence.
Therefore, it was irrelevant that he did not pay income tax in Croatia, that he
had health insurance in the Czech Republic and not in Croatia, and that he
had been granted the right to reside permanently in the Czech Republic. By
having his domicile in Croatia he failed to satisfy the conditions for
exemption from payment of customs duties set forth in Article 5 of Annex C
to the Convention on Temporary Admission (the Istanbul Convention),
which stated that the registered owner of a vehicle registered abroad must,
in order to qualify for exemption, have his domicile outside the territory of
the State into which the vehicle was being brought (see paragraph 45
below).
21. On 8 September 2008 the High Court for Administrative Offences
(Visoki prekrajni sud Republike Hrvatske) quashed the first-instance
decision on account of incomplete facts, and remitted the case to the
Customs Administration. The relevant part of that decision reads as follows:
[The Customs Administration] states, as the decisive reason for its decision to find
the accused guilty, that [he] has his domicile in ... Croatia, at [an] address in Zagreb,
..., and that the fact that he possesses a residence permit, that is, a valid visa, of the
Czech Republic, is not sufficient evidence for the accused to be entitled to import
[his] vehicle with total exemption from customs duties under the Convention on
Temporary Admission.
However, it is precisely such explanation of the contested decision that, along with
the other elements in the case file, shows that the taking of evidence was flawed, that
[the Customs Administration] did not give [sufficient] reasons for the decisive facts

2
Approximately, EUR 690 at the time.
4 AJA v. CROATIA JUDGMENT

on which it based its decision, and that they [that is, those facts and the reasons given]
are in strong contradiction with each other. [In particular, the Customs
Administration] while acknowledging the fact that [the accused] possesses a residence
permit, that is, a visa, of the Czech Republic, further gives as reasons [to support the
finding] that the accused has a domicile in ... Croatia, that he is not a taxpayer in ...
Croatia, and that he is not even insured with the Croatian Health Insurance Fund.
....
... [D]uring the first-instance proceedings [before the Customs Administration] the
accused stated circumstances and furnished evidence which, in his view, suggested
that he had not committed the offence of which he was accused. [The Customs
Administration therefore] needed to examine the evidence more thoroughly with a
view to establishing the [relevant] facts completely and correctly.
...
This court considers that what is missing in the present case are the reasons for not
accepting the status of the accused in the Czech Republic, the explanation of where
the accused actually lives [resides] and, consequently, a clear conclusion as to whether
or not he satisfied the conditions set out in Article 5 of Annex C of the Convention on
Temporary Admission ....
22. In the resumed proceedings, by a decision of 9 October 2008 the
Customs Administration again found the applicant guilty of committing the
same administrative offence and fined him HRK 5,000. The Customs
Administration again found that at the time of the commission of the
offence the applicant had had his domicile in Croatia according to the
Domicile and Residence of Citizens Act (see paragraph 32 below) and thus
did not satisfy the conditions for exemption from payment of customs duties
set forth in Article 5 of Annex C to the Istanbul Convention
(see paragraph 45 below). Therefore, the fact that the applicant resided in
the Czech Republic was of no relevance as he had not proved that he had his
domicile there. The relevant part of that decision reads as follows:
After having examined the evidence ..., this authority finds that the accused,
Miljenko aja, committed the customs-related administrative offence he was charged
with, defined in section 241(1) subparagraph 10 of the Customs Act.
Section 241(1) subparagraph 10 [of the Customs Act] provides that a fine for an
administrative offence is to be imposed on a person who treats goods as if they satisfy
the conditions for temporary admission, and that conduct is contrary to the conditions
for the temporary admission of goods set forth in the Customs Act or in the [Istanbul]
Convention.
In the proceedings it was established beyond doubt that on 15 June 2008 the accused
was found operating the vehicle in question with foreign licence plates of the Czech
Republic on the territory of Croatia as if he satisfied the conditions for temporary
admission, and that conduct was contrary to the conditions for temporary admission of
goods set forth in the Customs Act or in the [Istanbul] Convention because he was a
Croatian national who at the time of the commission of the offence had his domicile
in Croatia.
The rights and obligations of participants in customs proceedings and the powers of
the customs authorities as regards means of transport imported by natural persons into
AJA v. CROATIA JUDGMENT 5

Croatian customs territory are regulated by the provisions of the [Istanbul]


Convention. Likewise, customs proceedings and supervision of means of transport
with foreign licence plates in the Croatian customs territory is regulated by the
provisions of the Customs Act and the Decree on the implementation of the Customs
Act.
It is established beyond dispute that the accused is a Croatian national who at the
time of ... the offence had his domicile in ... Croatia. His defence that he had a
registered residence in the Czech Republic was not accepted as a ground for
exemption from liability ... Namely, the mere fact that he possesses a residence permit
is not a proof that would entitle him to import [his] car with total relief from payment
of customs duties under the Convention on Temporary Admission because he does not
have his domicile abroad.
This is so because the procedure for temporary admission of private means of
transport is regulated by Article 5 of Annex C to the [Istanbul] Convention in such a
way that means of transport for private use must be registered in a territory other than
that of temporary admission in the name of a person having a seat or domicile outside
the territory of temporary admission and be imported and used by persons residing in
that territory.
As regards his personal status, it has been established beyond doubt that the accused
is a Croatian national, and that until 17 May 2008 he had [his] domicile in Croatia, in
Zagreb. Furthermore, after the accused was reported as having committed the
administrative offence, he de-registered his domicile in Zagreb in this authoritys
view merely to avoid liability for the offence. At the time of the commission of the
offence the accused did not satisfy the conditions for temporary importation with total
relief and [was thus not entitled to] operate a vehicle with foreign licence plates.
Namely, [Article 5 of] Annex C to the [Istanbul] Convention expressly provides that
the right to temporary importation belongs to persons who have domicile outside the
territory of temporary admission, that is, outside Croatia.
This authority has examined the argument of the accused that he is not a taxpayer in
Croatia, which is evident from the certificate of 23 June 2008 issued by the Tax
Administration, as well as the evidence [to the effect] that he is neither insured with
the Croatian Health Insurance Fund nor has social security [cover] in Croatia.
However, that evidence cannot lead to the adoption of a different decision, because
the fact of [having or not] health insurance or social security is not evidence of
domicile abroad.
This authority has also taken into account the fact that the accused had health
insurance in the Czech Republic as of 3 October 2007. However, having [health]
insurance is itself not relevant for the adoption of a different decision because the fact
of [possessing] insurance, which according to the accuseds own statement is
voluntary, does not give [him] the right to temporary admission of the vehicle in
question with total relief.
On the basis of these findings of fact, and in accordance with the foregoing
provisions, this authority has established beyond doubt that the accused did not satisfy
the conditions for temporary admission, and that, by handling the vehicle in question
contrary to [those] conditions, he committed the administrative offence defined in
section 241(1) subparagraph 10 of the Customs Act.
This authority has [also] examined the argument of the accused that he is registered
in the Czech Republic [as an alien] for an extended stay, of which he submitted
evidence [in the form of] a certificate [issued] by the Police of the Czech Republic.
6 AJA v. CROATIA JUDGMENT

However, that evidence does not prove his domicile abroad, but only his stay. What is
more, at the hearing held on 30 September 2008 the accused himself stated only the
fact of his residence in the Czech Republic, which confirms that at the time of the
commission of the offence he did not satisfy the conditions for the temporary
admission of vehicles with total relief, in accordance with Annex C to the [Istanbul]
Convention.
In particular, it is beyond doubt that at the time of the commission of the offence the
accused had his domicile in Croatia. Section 2 of the Domicile and Residence of
Citizens Act provides that a citizens domicile is the place where he has settled with
the intention of permanently living there, and in which he has permanent
accommodation secured.
The solemn statement of the commercial company [ERC] of 13 August 2008 stating
that it would provide accommodation for Miljenko aja as of 1 January 2008 was also
examined in the proceedings. However, [that statement] is not decisive for exempting
[the accused] from liability because it was issued after this authority adopted its [first]
decision of 31 July 2008 and because the statement in question does not give him the
right to temporary admission with total relief.
The statement given by P.. (before a notary public on 22 September 2008), which
was also examined during the proceedings, is illogical and contrary to [both] the
statement of Miljenko aja and the solemn statement of 13 August 2008 in that it
suggests that the flat [in Prague in which the applicant claimed to be living] was
rented to P.., and not to the accused, whereas the solemn statement of ERC of
13 August 2008 suggested that it provided Miljenko aja with accommodation at the
address [in Prague]. After examining that evidence, this authority considers that it was
obtained with a view to proving that the accused had rented accommodation to live in
abroad.
Moreover, the evidence of the accused that his wife is a director of company PZM in
Prague is not relevant either, because in his statement of 22 July 2008 he stated that
his wife lived in Zagreb and had her business in Croatia.
This authority does not dispute the fact that the accused is disabled, with a degree of
disability of 100%, of which he submitted as evidence a membership card [issued by
an association of disabled persons] in his name indicating his domicile [as being] in
Zagreb ...
In the proceedings all the evidence furnished by the accused was examined.
However, by that evidence the accused did not prove that he had been living abroad.
From all the evidence it is apparent that at the time of the commission of the offence
the accused was a Croatian national who had his domicile in Croatia, with all the
rights and obligations attached to that. The accused could not pose in Croatia as a
person having domicile abroad and enjoy the rights of [such] a person in [his own]
country, where until 17 June 2008 he had his domicile. Therefore, the accused did not
satisfy the conditions for the temporary admission of a foreign car to the territory of
the Republic of Croatia with total relief under Annex C [to the Istanbul Convention]
and the Decree on the implementation of the Customs Act because his domicile was in
Croatia at the time of the commission of the offence.
In the light of the foregoing, this authority has adopted a decision finding the
accused guilty, as stated in the operative provisions.
23. By a decision of 29 October 2008 the High Court for Administrative
Offences dismissed an appeal by the applicant and upheld the first-instance
AJA v. CROATIA JUDGMENT 7

decision, endorsing the reasons given therein. The relevant part of that
decision reads as follows:
Against the first-instance decision the accused ... lodged ... an appeal on the
grounds of breaches of procedure, incomplete and incorrect findings of fact,
misapplication of the substantive law, and a wrong decision on the sanction. In the
appeal the accused essentially argues ... that he has proved that at the time of entry
into the Republic of Croatia he satisfied all statutory requirements for legally entering
[Croatia] with the car in question, that the first-instance authority called into question
the validity of the visa of the Czech Republic, where he was [first] granted an
extended stay, and from 18 February 2008 the right to reside permanently, [and] that
he uses the flat in Prague without restrictions. He therefore considers that there are no
legal grounds or evidence for a finding that he committed the administrative offence
in question.
...
The appeal is unfounded.
...
The accused unjustifiably denies liability for the administrative offence committed,
because the first-instance authority[,] ... on the basis of his statement given at the
hearing of 30 September 2008 and ... the written evidence[,] ... correctly concluded
that his conduct had all the elements of the administrative offence defined in section
241(1) subparagraph 10 of the Customs Act. [The accused] was on 15 June 2008 in
Zagreb found operating a Mercedes Benz vehicle ... with foreign licence plates of the
Czech Republic as if he satisfied the conditions for temporary admission, and that
conduct was contrary to the conditions for temporary admission of goods given that at
the time of the commission of the offence he had his domicile in Croatia. Since that
conduct was contrary to the conditions for temporary admission of goods set forth in
the Customs Act and the [Istanbul] Convention, he committed the administrative
offence defined in section 210(1) subparagraph 10 of the Customs Act.
...
The other appellate arguments are also unfounded because the ... Customs
Administration ... correctly and accurately established the [relevant] facts ... and
correctly applied the substantive law...
In particular, special conditions for the temporary importation of means of transport
are prescribed in Article 5 of Annex C to the Convention on Temporary Admission in
Chapter III, where subparagraph (b) provides that means of transport for private use
must be registered in a territory other than that of temporary admission, in the name of
a person having seat or domicile in a territory other than that of temporary admission,
and [must] be imported and used by persons having domicile in such a territory. The
Domicile and Residence of Citizens Act in its section 2 provides that domicile is the
place where a citizen has settled with the intention of permanently living there.
Therefore, given that during the [first-instance] proceedings the decisive fact that the
accused is a Croatian national who at the time of the commission of the offence had
his domicile in the territory of the Republic of Croatia was established beyond doubt,
he did not satisfy the conditions for temporary admission of a foreign car to the
territory of the Republic of Croatia set out in the above-cited provisions of the Annex
to the Convention on Temporary Admission.
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[This court] therefore upholds as correct in its entirety the decision of the first-
instance authority ... whereby the accused was found guilty and sanctioned for the
administrative offence defined in section 210(1) subparagraph 10 of the Customs Act
...
24. The applicant then, on 12 November 2008, lodged a constitutional
complaint against the second-instance decision, alleging violations of his
constitutional rights to fair proceedings, equality before the law and equality
before the courts and other public authorities. In so doing he relied on
Article 14 paragraph 2, Article 26 and Article 29 paragraph 1 of the
Croatian Constitution (see paragraph 26 below). He argued that the High
Court for Administrative Offences had misinterpreted the text of Article 5
of Annex C to the Istanbul Convention, which in the official text did not
refer to domicile but to living abroad. Therefore, the fact that while
living in Prague he had kept his domicile in Croatia was not relevant. The
applicant further argued that the meaning given to certain legal terms in
domestic legislation could not be relied on in interpreting the same or
similar terms used in international agreements. In particular, the applicant
argued as follows:
In the decision [of 29 October 2008] the High Court for Administrative Offences
totally wrongly quoted the text of Article 5 subparagraph (b) ... of Annex [C] to the
Convention on Temporary Admission by stating [that it] provides that means of
transport for private use must be registered in a territory other than that of temporary
admission, in the name of a person having seat or domicile in a territory other than
that of temporary admission, and [must] be imported and used by persons having
domicile in such a territory [emphasis added].
However, the text Article 5 subparagraph (b) ... of Annex [C] to the Convention on
Temporary Admission published in the Official Gazette [ International agreements]
no. 16/98 is completely different and reads:
... means of transport for private use must be registered in a territory other than that
of temporary admission, in the name of a person having seat or domicile in a territory
other than that of temporary admission, and [must] be imported and used by persons
living in such a territory [emphasis added].
The obvious difference between [the two texts] is that the High Court for
Administrative Offences refers to [having] domicile in the territory of another State as
a condition for using a foreign car whereas the text of the Convention [on Temporary
Admission] ... refers to ... living in the territory of another State, which is legally not
the same.
Besides, the fact of living in the territory of another State, that is, in the State from
which the disputed car originates, cannot be assessed in accordance with Croatian
laws, and especially not in the way [the High Court for Administrative Offences] did
it, but in accordance with the Convention [on Temporary Admission] itself and the
Decree on the implementation of the Customs Act, .... [T]hat fact of living in the
territory of another State is to be proved by work or residence permit.
... all customs offices in Croatia have, upon a citizens entry into [Croatia] by car,
been establishing the fact of living in another State by checking only work or
residence permit.
AJA v. CROATIA JUDGMENT 9

It is evident that in the instant case [the authorities] departed from the relevant law
and the established practice ... by deliberately misquoting the relevant provisions with
a view to creating conditions for the complainants conviction at all costs.
...
[T]he complainant proved beyond doubt, by presenting a valid visa for an extended
stay, the contract on the use of a flat and a social security certificate, that he has de
jure and de facto been living in the Czech Republic, and that he had legally bought the
car in accordance with the Czech laws. [It follows that] the complainant perfectly
legally entered Croatia in accordance with Article 5 subparagraph (b) ... of [Annex C
to] the Convention on Temporary Admission, and that by so doing he did not commit
a customs offence defined in section 241(1) subparagraph 10 of the Customs Act. In
any event, the customs office [in question] would not have allowed the complainant to
enter the territory of Croatia if he did not satisfy the said conditions.
It is totally unclear why the complainant should, as stated in the first-instance
decision, pay any customs debt [in the situation] where he did not ask for customs
clearance but only temporary admission. If the customs authorities considered that
temporary admission was not allowed then they could have ordered that the car be
exported from Croatia ... at the expense of the complainant.
The above described proceedings are certainly a chicanery for the reasons as stated
and at the same time constitute a dangerous precedent for all other citizens of Croatia
...
If such proceedings would apply to all Croatian nationals operating cars with foreign
licence plates, only a few [such] cars daily could enter Croatia. Besides, if that view of
the lower judicial and other authorities on the [interpretation of the relevant]
substantive law is to be accepted, not a single one of hundreds of thousands of
Croatian citizens temporarily working in Germany, Italy or Switzerland could enter
Croatia because they all legally have domicile in Croatia. [In this way] several
thousands of cars should be confiscated every year, especially from citizens of Bosnia
and Herzegovina having double nationality who enter Croatia on a daily basis.
In particular, the [contested] decisions infringed the right to impartial and fair
proceedings guaranteed by Article 29 of the Croatian Constitution because for the
reasons set out above those decisions are certainly neither fair nor impartial. On the
contrary, they are absolutely biased and blatantly unfair.
The decision to prosecute only the complainant and not hundreds of thousands of
others certainly constitutes a violation of Article 14 paragraph 2 of the Constitution
whereby equality before the law is guaranteed to the complainant, and also of
Article 26 of the Constitution which guarantees equality of all Croatian citizens before
courts and other State authorities.
25. By a decision of 8 April 2009 the Constitutional Court (Ustavni sud
Republike Hrvatske) dismissed the applicants constitutional complaint,
finding that the contested decisions were based on a constitutionally
acceptable interpretation and application of the relevant substantive law.
The Constitutional Courts decision was served on the applicants
representative on 22 April 2009. It reads as follows:
5. According to section 241(1) subparagraph 10 of the Customs Act a ... natural
person shall be liable for an administrative offence if he or she handles [the] goods as
if they satisfy the conditions for temporary admission, and that conduct is contrary to
10 AJA v. CROATIA JUDGMENT

the conditions for temporary admission of goods set forth in the Customs Act or in the
Convention on Temporary Admission,
Convention on Temporary Admission, Annex C, Article 5 subparagraph (b)
provides as follows:
(b) means of transport for private use must be registered in a territory other than
that of temporary admission, in the name of a person having seat or domicile in a
territory other than that of temporary admission, and be imported and used by
persons living in such a territory.
Having regard to the cited provisions of the Customs Act and Article 5
subparagraph (b) of the Annex C to the Convention on Temporary Admission, as well
as the facts established in the proceedings ... (in particular the fact that it was
established ... that at the time of the commission of the offence the complainant had
registered domicile in Croatia in accordance with the relevant provisions of the
Domicile and Residence of Citizens Act), the Constitutional Court finds that the legal
views expressed in the contested decisions are based on a constitutionally acceptable
interpretation and application of the relevant substantive law. The Constitutional
Court considers that the relevant administrative authority and the High Court for
Administrative Offences, relying on the facts established in the proceedings, gave
reasons for their views expressed in the contested decisions, which undoubtedly do
not result from an arbitrary interpretation and application of the relevant substantive
law.
The Constitutional Court therefore finds that the complainants right to equality
before the law guaranteed by Article 14 paragraph 2 of the Constitution was not
violated by the contested decisions.
6. Article 29 paragraph 1 of the Constitution provides as follows:
Everyone has the right that an independent and impartial court established by law
decides fairly and within a reasonable time on his rights or obligations, or as regards
suspicion or accusation of a criminal offence.
[In the present case] the administrative and judicial authorities acted within their
jurisdiction established by law. It is evident from the case-file that the first-instance
administrative authority took evidence in accordance with the Administrative
Offences Act and that the High Court for Administrative Offences decided on the
complainants appeal on the merits. It is also evident that the complainant had an
opportunity to follow and participate in the proceedings, and that he could undertake
all permitted procedural actions and lodge a remedy. The contested decisions are
sufficiently reasoned and adopted in accordance with the relevant procedural rules.
For these reasons, the [Constitutional] Court finds that the contested decisions did
not violate the complainants constitutional right to fair proceedings.
As regards the complainants argument that in similar cases the relevant authorities
proceed differently, that in itself does not mean that the complainants constitutional
right was violated by the contested decisions. In the [Constitutional] Courts view, in
the proceedings [complained of] the contested decisions were adopted in accordance
with the relevant legislation. [T]herefore the fact that different decisions may have
been adopted in other proceedings is of no relevance for the lawfulness of the
decisions contested before the Constitutional Court in these proceedings, nor can it
lead to a different decision in this particular case.
7. Article 26 of the Constitution ... is not relevant in this case.
AJA v. CROATIA JUDGMENT 11

II. RELEVANT CROATIAN LAW AND PRACTICE

A. The Constitution

26. The relevant part of the Constitution of the Republic of Croatia


(Ustav Republike Hrvatske, Official Gazette no. 56/90 with subsequent
amendments) provides as follows:

Article 14(2)
Everyone shall be equal before the law.

Article 26
Every citizen of the Republic of Croatia and [every] foreigner shall be equal before
the courts and other State or public authorities.

Article 29(1)
Everyone has the right that an independent and impartial court established by law
decides fairly and within a reasonable time on his rights or obligations, or as regards
suspicion or accusation of a criminal offence.

Article 31(1)
No one shall be punished for an act which, before it was committed, was not
defined as a criminal offence by a statute or international law ...

Article 134
International agreements in force which have been concluded and ratified in
accordance with the Constitution and made public shall be part of the internal legal
order of the Republic of Croatia and shall have precedence over the [domestic]
statutes. ...

B. The Constitutional Court Act

1. Relevant provisions
27. The relevant part of the 1999 Constitutional Act on the
Constitutional Court of the Republic of Croatia (Ustavni zakon o Ustavnom
sudu Republike Hrvatske, Official Gazette no. 99/99) the Constitutional
Court Act), as amended by the 2002 Amendments (Ustavni zakon o
izmjenama i dopunama Ustavnog zakona o Ustavnom sudu Republike
Hrvatske, Official Gazette no. 29/02), which entered into force on 15 March
2002, reads as follows:

Section 62
1. Anyone may lodge a constitutional complaint with the Constitutional Court if he
or she deems that a decision of a State authority, local or regional government, or a
legal person invested with public authority, on his or her rights or obligations, or as
12 AJA v. CROATIA JUDGMENT

regards a suspicion or accusation of a criminal offence, has violated his or her human
rights or fundamental freedoms, or the right to local or regional government,
guaranteed by the Constitution (constitutional right) ...
2. If another legal remedy is available in respect of the violation of the constitutional
rights [complained of], the constitutional complaint may be lodged only after that
remedy has been exhausted.
3. In matters in which an administrative action or, in civil and non-contentious
proceedings, an appeal on points of law [revizija] is available, remedies shall be
considered exhausted only after a decision on these legal remedies has been given.

Section 65(1)
A constitutional complaint shall contain ... an indication of the constitutional right
alleged to have been violated, [together] with an indication of the relevant provision
of the Constitution guaranteeing that right ...

Section 71(1)
... [t]he Constitutional Court shall examine only the violations of constitutional
rights alleged in the constitutional complaint.

2. The Constitutional Courts case-law


28. On 9 July 2001 the Constitutional Court delivered decision
no. U-III-368/1999 (Official Gazette no. 65/01) in a case where the
complainant relied in her constitutional complaint on Articles 3 and
19 paragraph 1 of the Constitution, neither of which, under that courts case-
law, concerned a constitutional right. The Constitutional Court nevertheless
allowed the constitutional complaint, finding violations of
Articles 14, 19 paragraph 2 and 26 of the Constitution, on which the
complainant had not relied, and quashed the contested decisions. In so
deciding it held as follows:
... a constitutional complaint cannot be based on either of the constitutional
provisions relied on [by the complainant in her constitutional complaint].
However, the present case, as will be explained further, concerns a specific legal
situation as a result of which this court, despite [its] finding that there have not been,
and cannot be, any violations of the constitutional rights explicitly relied on by the
complainant, considers that there are circumstances which warrant the quashing of
[the contested] decisions.
...
Namely, it is evident from the constitutional complaint and the case file that there
have been violations of [constitutional] rights, in particular those guaranteed by
Article 14 (equality, equality before the law), Article 19 paragraph 2 (guarantee of
judicial review of decisions of state and other public authorities) and Article 26
(equality before the courts and other state or public authorities) of the Constitution ...
AJA v. CROATIA JUDGMENT 13

C. The Customs Act

1. Relevant provisions
29. The relevant provisions of the Customs Act (Carinski zakon, Official
Gazette, no. 78/99 with subsequent amendments), which was in force
between 1 January 2000 and 30 June 2013, at the material time read as
follows:

Section 4(1)
For the purposes of this Act certain terms have the following meaning:
1. ...
2. persons having domicile seat in the customs territory are:
- Natural persons having domicile or habitual residence in the customs territory,
...

Section 241(1)
A fine ... of between 1,000 and 100,000 kunas for an administrative offence shall be
imposed on ... a natural person:
...
10. if he or she handles [the] goods as if they satisfy the conditions for temporary
admission, and that conduct is contrary to the conditions for temporary admission of
goods set forth in this Act or in the Convention on Temporary Admission,
...

2. Relevant subordinate legislation


30. The Decree on the implementation of the Customs Act (Uredba za
provedbu Carinskog zakona, Official Gazette, no. 161/03 with subsequent
amendments), which was in force between 1 November 2003 and 30 June
2013, at the material time read as follows:
14 AJA v. CROATIA JUDGMENT

Chapter 5

Temporary Importation

Division 2

Conditions for Granting Temporary Importation with Total Relief

Subdivision 1

Road vehicles

Section 265(1)
Total relief [from customs duties] shall be granted for road vehicles ... in the
following cases:
(a) if they are registered outside the customs territory of the Republic of Croatia and
in the name of a person outside [that territory]; in the event that [they] are not
registered, these conditions shall be considered satisfied if they are owned by a person
having seat outside the customs territory of the Republic of Croatia,
b) if they are used by persons having seat outside the customs territory of the
Republic of Croatia ...
...

Section 269
Without prejudice to the application of any special provisions, the time-limit for
the completion of the temporary importation is ... for road vehicles for private use ...
six months within a twelve-month period.

D. The General Tax Act

31. The relevant part of the General Tax Act (Opi porezni zakon,
Official Gazette, nos. 127/02 and 150/02), which was in force between
1 January 2001 and 31 December 2008, provided as follows:
I. BASIC PROVISIONS

General provision

Section 1
This Act regulates the relationship between taxpayers and the tax authorities which
apply legislation on taxes and other levies, unless otherwise provided in special
legislation concerning particular types of taxes or other levies, and represents the
common basis of the tax system.
AJA v. CROATIA JUDGMENT 15

Forms of levies

Section 2(1) and (3)


(1) Levies within the meaning of this Act are: taxes, customs duties, [public] fees
and contributions.
...
(3) Customs duties are taxes paid on imports.
...

IV. TAX LIABILITY RELATIONSHIP

4. Taxpayers abode

[Fiscal] Domicile and habitual residence

Section 37
(1) For the purposes of this Act it shall be considered that the taxpayer has [fiscal]
domicile [prebivalite] [in a place] where he or she owns or possesses a home [stan]
continuously for [a period of] at least 183 days in one or two calendar years. Actual
presence in the home is not required.
(2) If the taxpayer owns or possesses more than one home his [fiscal] domicile
shall be in the place where his or her family has domicile, and for the taxpayer who is
single, the place where he or she predominantly stays, or the place from which he or
she predominantly sets off to work or to exercise other [professional] activity.
(3) If the taxpayer has [fiscal] domicile both in Croatia and abroad, he or she shall
be considered a domestic taxpayer.
(4) A taxpayer shall have his or her habitual residence [uobiajeno boravite]
within the meaning of this Act in a place in which he or she is staying under
circumstances from which it may be concluded that he or she does not reside in that
place or that territory only temporarily. Permanent residence or intermittent residence
lasting at least 183 days in one or two calendar years shall be considered habitual
residence for the purposes of this Act. Short periods of absence lasting no longer than
one year shall not be relevant for the determination of habitual residence.

E. The Domicile and Residence of Citizens Act

1. Relevant provisions
32. The relevant provisions of the Domicile and Residence of Citizens
Act (Zakon o prebivalitu i boravitu graana, Official Gazette
no. 53/1991), which was in force between 8 October 1991 and 29 December
2012, read as follows:

Section 1
Every Croatian citizen present on the territory of the Republic of Croatia has
domicile in the Republic of Croatia, and may also have residence.
16 AJA v. CROATIA JUDGMENT

Section 2
A citizens domicile [prebivalite] is the place where he or she has settled with the
intention of permanently living there.
...

Section 5
A citizens residence [boravite] may be habitual or temporary.
A habitual residence [uobiajeno boravite] is a place in which a citizen resides
permanently without the intention of settling there.
A temporary residence [privremeno boravite] is a place in which a citizen stays up
to thirty days.

Section 6(1)
Citizens have a duty to register and de-register domicile, habitual residence and
any change of address.

Section 16
(1) A fine of between [10 and 25 euros] in kuna equivalent for an administrative
offence shall be imposed on:
- those who do not register or de-register their domicile or change of address or do
not report residence or do not do so within the prescribed time-limit (section 6
paragraph 1, ...);
- those who give false or incorrect information when registering their domicile,
residence or change of address (...).

2. Relevant case-law and the position of legal scholars


33. It has generally been accepted among Croatian legal scholars that
domicile has two elements: (a) the objective element (corpus), that is, the
fact that an individual has settled (established, set up a home) in a particular
place, and (b) the subjective element, that is, the intention (the will) of
permanently living there (animus semper manendi). However, once
established, domicile is not lost by the mere loss of one of its constituent
elements. For example, a person who is (temporarily) absent from the town
where he or she has established his or her domicile will not lose that status
if he or she wishes to live there permanently, that is, as long as he or she
intends to return to it. Likewise, a person who has established his or her
domicile in a particular town but no longer intends to (permanently) live
there will not lose his or her domicile in that town while he or she still lives
there, that is, as long as he or she does not actually move elsewhere.
34. Thus Croatian nationals who temporarily work and live abroad are
considered to have retained their domicile in Croatia (see, for example,
Supreme Court cases nos. G-4608/75 and Rev-325/81). For example, in
case no. Us-8015/2002 of 23 November 2006 the Administrative Court
quashed the decision of the Ministry of the Interior to de-register of its own
AJA v. CROATIA JUDGMENT 17

motion the domicile of a Croatian national who had left Croatia for
employment in a foreign country. It ruled that there was no legal basis for
such a decision in the Domicile and Residence of Citizens Act as the
plaintiff had left Croatia only temporarily, without the intention of
permanently remaining abroad. The relevant part of that judgment reads as
follows:
From the provisions [of the Domicile and Residence of Citizens Act] ... it follows
that every Croatian national present in the territory of the Republic of Croatia has a
guaranteed domicile in the Republic of Croatia and that Croatian nationals freely
decide which place in [its] territory ... to choose as their domicile. In so doing what is
decisive is the will of the citizens themselves, because only the place where a citizen
has settled with the intention of permanently living there may be regarded as his or
her domicile...
The case file ... suggests that the plaintiff, her husband and her children had ... their
registered domicile in the Republic of Croatia in the town of H. ... and that they had
all gone together, for reasons of the husbands employment, to live temporarily in ...
Bosnia and Herzegovina, without the intention of staying there permanently.
Furthermore, [the case file] also suggests that the plaintiffs husband is, together with
his father, the co-owner of a house in H., while in ... Bosnia and Herzegovina they do
not own any immovable property.
35. In that case the Administrative Court particularly emphasised that
the Domicile and Residence of Citizens Act did not provide how long a
person could be absent from the place of his or her domicile for the absence
to have legal consequences. For the same reason, in its judgment no. Rev-
87/1996-2 of 14 February 1996 the Supreme Court was able to rule, though
in the context of housing legislation, that the defendants (a Croatian
national) absence from Croatia for reasons of employment, which had lasted
six years during which he and his family lived in Canada, obtained
Canadian nationality and his children went to school, could still be
considered temporary.
36. While a person may have only one domicile, it is clear (see section 1
of the Domicile and Residence of Citizens Act in paragraph 32 above) that
he may at the same time have his domicile and (habitual) residence in
different places (for example, students, army recruits, prisoners, long-term
hospital patients, who study, serve or are being treated in a place different
from the place of their domicile).

F. The Administrative Offences Act

37. The relevant provisions of the Administrative Offences Act


(Prekrajni zakon, Official Gazette no. 107/07 with subsequent
amendments), which has been in force since 1 January 2008, are as follows.
38. Section 82(3) provides that if the Administrative Offences Act does
not contain specific provisions on the procedure in administrative offence
18 AJA v. CROATIA JUDGMENT

proceedings, the provisions of the Criminal Procedure Act


(see paragraph 41 below) should apply mutatis mutandis.
39. Sections 214-216 provide for the remedy of reopening of
proceedings before the High Court for Administrative Offences, and
regulate the procedure following a petition for reopening.
40. Section 220 reads as follows:
(1) The Principal State Attorney may lodge a request for the protection of legality
against final judicial decisions ... if the law has been breached.
(2) The provisions of the Criminal Procedure Act concerning the lodging of and
deciding on the request for the protection of legality shall be applied mutatis mutandis
in administrative offence proceedings.
(3) The State Attorney does not have to lodge a request for the protection of legality
if he or she considers that [even though] the law was breached, that breach did not
affect the correctness of the decision and [the case] does not concern a legal issue
important for the consistency of the case-law or for the protection of human rights.

G. The Criminal Procedure Act

41. The relevant provisions of the Criminal Procedure Act (Zakon o


kaznenom postupku, Official Gazette no. 152/08 with subsequent
amendments), which has been in force since 1 September 2011, read as
follows:

Section 502
(1) ...
(2) The provisions concerning the reopening of criminal proceedings shall be
applicable also in the case where a petition to review a final judicial decision has been
filed on the basis of a final judgment of the European Court of Human Rights
whereby, in respect of the accused, a violation of the rights and freedoms under the
Convention for the Protection of Human Rights and Fundamental Freedoms was
found.
(3) A petition for reopening of the proceedings on the basis a final judgment of the
European Court of Human Rights may be lodged within thirty days of the date on
which the judgment of the European Court of Human Rights becomes final.
...

Section 509
(1) The Principal State Attorney may lodge a request for the protection of legality
against final judicial decisions if the law has been breached.
(2) The Principal State Attorney shall lodge a request for the protection of legality
against a judicial decision adopted in [criminal] proceedings in a manner which
constitutes a violation of fundamental human rights and freedoms guaranteed by the
Constitution, international law or [primary] legislation.
(3) ...
AJA v. CROATIA JUDGMENT 19

III. RELEVANT CZECH LAW

The Aliens Residence Act

42. The relevant part of Act No. 326/1999 on the Residence of


Foreigners in the Territory of the Czech Republic (Zkon . 326/1999 Sb., o
pobytu cizinc na zem esk republiky the Czech Residence of Aliens
Act), as in force at the material time, provides as follows:

Section 68
(1) A permanent residence permit shall be issued to foreigners, at their request, after
five years of continuous residence in [the country].
(2) The period referred to in paragraph 1 shall include residence in [the country] on
[the basis of] a long-term visa [that is, a visa for a term exceeding 90 days] or a [long-
term] residence permit ...
(3) The period referred to in paragraph 1 shall include also periods of absence [from
the country] during the time of residence, if each period of absence does not exceed
six consecutive months, or if, in total, they do not exceed ten months ...
(4) ...

IV. RELEVANT INTERNATIONAL LAW

A. The Istanbul Convention on Temporary Admission

1. Relevant provisions
43. The Convention on Temporary Admission (the Istanbul
Convention) of 26 June 1990, which entered into force on 27 November
1993, is an instrument of the World Customs Organization. Temporary
admission without payment of customs duties is provided for in order to
minimise the costs of border crossing and facilitate the free movement of
goods across frontiers. The aim of the Istanbul Convention is to simplify
and harmonise temporary admission procedures. It has sixty-five
Contracting Parties (of which forty-four have ratified its Annex C
Concerning Means of Transport), including Croatia, the Czech Republic and
the European Union.
44. According to its Article 34 3, the Istanbul Convention was drafted
in a single original, in the English and French languages, both texts being
equally authentic.
45. The relevant provisions of the Istanbul Convention read as follows:
20 AJA v. CROATIA JUDGMENT

CHAPTER I

General provisions

Definitions

Article 1
For the purposes of this Convention, the term:
(a) temporary admission means :
the Customs procedure under which certain goods (including means of transport)
can be brought into a Customs territory conditionally relieved from payment of import
duties and taxes and without application of import prohibitions or restrictions of
economic character; such goods (including means of transport) must be imported for a
specific purpose and must be intended for re-exportation within a specified period and
without having undergone any change except normal depreciation due to the use made
of them;
...
...

ANNEX C

ANNEX CONCERNING MEANS OF TRANSPORT


...

CHAPTER II

Scope

Article 2
The following shall be granted temporary admission in accordance with Article 2
of this Convention:
(a) means of transport for commercial use or for private use;
(b) ...

CHAPTER III

Miscellaneous provisions

Article 5
For the facilities granted by this Annex to apply:
(a) ...
(b) means of transport for private use must be registered in a territory other than that
of temporary admission, in the name of a person established or resident in a territory
other than that of temporary admission [the French text of the Istanbul Convention
reads: rsidant en dehors du territoire dadmission temporaire], and be imported and
used by persons resident in such a territory [rsidant dans un tel territoire].
AJA v. CROATIA JUDGMENT 21

...

Article 9
1. ...
2. Means of transport for private use may remain in the territory of temporary
admission for a period, continuous or not, of six months in every period of twelve
months.
46. The Istanbul Convention entered into force in respect of Croatia on
3 December 1998. It was incorporated into the Croatian legal system by the
Governments Decree on Accession to the Convention on Temporary
Admission (Uredba o pristupanju Konvenciji o privremenom uvozu,
Official Gazette International Agreements, no. 16/98). The term persons
resident in Article 5 of Annex C was in the Croatian text of the Istanbul
Convention translated on its first occurrence as osobe s prebivalitem
(persons having domicile) and on its second occurrence as osobe koje
ive (persons living or persons who live). The Croatian version of
Article 5 of Annex C to the Istanbul Convention, as published in the
Official Gazette International Agreements (no. 16/1998 of 3 December
1998), reads as follows:
Za primjenu povlastica koje jami ovaj Aneks:
(a) ...;
(b) prijevozna sredstva za privatnu uporabu moraju biti registrirana na teritoriju
razliitom od teritorija privremenog uvoza, na ime osoba sa sjeditem ili prebivalitem
na teritoriju izvan teritorija privremenog uvoza, i moraju ih uvesti i koristiti osobe
koje ive na tom teritoriju.

2. The practice of the Croatian authorities

(a) The practice as submitted by the Government

(i) The practice of the Customs Administration and the case-law of the High
Court for Administrative Offences
47. From the (unpublished) practice of the Customs Administration
(decisions nos. P-1411/07 of 11 September 2007, P-374/08 of 27 November
2008, P-967/08 of 22 December 2008, and P-520/08 of 23 April 2010) and
the case-law of the High Court for Administrative Offences (decisions
nos. FP-88/09 of 28 January 2009, FP-75/09 of 25 March 2009, FP-
1162/10 of 8 February 2011, and FP-1285/07 of 18 May 2011), submitted
by the Government, it follows that those authorities interpreted the term
persons resident in Article 5 of Annex C to the Istanbul Convention as
persons having domicile, and in so doing referred to the definition of
domicile provided in the Domicile and Residence of Citizens Act
(see paragraph 32 above).
22 AJA v. CROATIA JUDGMENT

(ii) The case-law of the Administrative Court


48. From the (published) case-law of the Administrative Court submitted
by the Government, it follows that that court has also interpreted the term
persons resident in Article 5 of Annex C to the Istanbul Convention as
persons having domicile, and in so doing referred to the definition of
domicile provided in the Domicile and Residence of Citizens Act.
49. In cases nos. Us-12183/2005 of 29 October 2008 and Us-
11809/2005 of 19 March 2009, the Administrative Court dismissed actions
by plaintiffs who had imported vessels registered abroad into Croatia
without paying the relevant taxes. It so decided because it had established
that the plaintiffs had both domicile and habitual residence in Croatia. In
particular, the court found that the plaintiffs had domicile in Croatia not
only because they had their registered domicile in the country, but also
because they had had health and pension insurance there.
50. In case no. Us-11745/2001 of 18 January 2006 the Administrative
Court dismissed an action by a plaintiff who had imported a car registered
abroad into Croatia without paying the relevant taxes. It established that the
plaintiff had domicile in Croatia not only because he had registered
domicile in the country but also because he did not possess a foreign
residence or work permit.

(b) Other relevant practice

(i) The Customs Administrations opinions


51. In a series of opinions issued in the period between 19 December
2006 and 10 January 2013 (opinions no. 212-01/06-01/126 of 19 December
2006, no. 415-01/07-01/09 of 30 March 2007, no. 413-01/07-01/70 of
9 May 2007, no. 413-04/07-01/127 of 10 August 2007, no. 413-01/08-
01/235 of 4 June 2008, no. 413-01/08-01/557 of 12 December 2008,
no. 413-01/09-01/59 of 26 January 2009, no. 303-01/09-01/03 of 6 February
2009, no. 413-01/09-01/247 of 15 April 2009, no. 413-01/10-01/209 of
31 May 2010, no. 413-01/12-01/135 of 3 April 2012, no. 413-01/11-01/319
of 15 September 2011, no. 413-01/11-01/376 of 24 October 2011, no. 413-
01/12-01/77 of 27 February 2012, no. 413-01/12-01/199 of 23 May 2012,
no. 413-01/12-01/234 of 13 June 2012, no. 413-01/12-01/379 of
20 September 2012, no. 413-01/12-01/481 of 22 November 2012, no. 413-
01/13-01/4 of 3 January 2013, no. 413-01/13-01/7 of 7 January 2013, and
413-01/13-01/7 of 10 January 2013), issued in reply to queries from
individuals, the Customs Administration consistently held that the term
person resident referred to in Annex C to the Istanbul Convention was to
be interpreted as persons having habitual residence. In none of these
opinions did the Customs Administration refer to the definition of domicile
provided in either the Domicile and Residence of Citizens Act or the
General Tax Act. Rather, in one of the opinions (opinion of 31 May 2010) it
AJA v. CROATIA JUDGMENT 23

cited the definition of habitual residence provided in the Domicile and


Residence of Citizens Act (see paragraph 32 above), whereas in four of the
opinions (opinions of 22 November 2012 and of 3, 7 and 10 January 2013)
it referred to the definition of habitual residence provided in the General
Tax Act (see paragraph 31 above). While in the first of the above-cited
opinions (opinion of 19 December 2006) the Customs Administration held
that persons having registered domicile in Croatia could not be considered
to have habitual residence abroad, in another of the opinions it expressly
stated that domicile was irrelevant for determining whether a person had
habitual residence (opinion of 15 September 2011).
52. The view of the Customs Administration is best summarised by the
following quotation (opinions of 26 January 2009, 6 February 2009,
15 April 2009, 15 September 2011 and 20 September 2012):
The use of foreign goods in the customs territory of the Republic of Croatia, within
the temporary importation procedure, is governed by sections 145-152 of the Customs
Act and the corresponding provisions, that is, sections 260-297, of the Decree on the
implementation of the Customs Act, further to the International Convention on
Temporary Admission.
The basic rule in section 265 of the above-mentioned Decree is that motor vehicles
registered outside the customs territory of the Republic of Croatia in the name of a
person with habitual residence [s uobiajenim boravitem] outside the customs
territory can be used (operated) in our country only by those persons who also have
habitual residence [uobiajeno boravite] in another country (the notion of habitual
residence implies permanent stay in a certain territory for at least 183 days in a year).
In addition to foreign nationals residing in another country, Croatian nationals
residing in a third country for work, study or other reasons who occasionally enter
Croatia with their vehicles for a visit, holidays and the like may also benefit from this
rule. In the case of customs control [aimed at] establishing whether the
aforementioned conditions for the use of vehicles with foreign licence plates are met,
it is necessary to provide as evidence a residence permit, residence registration [form]
or [proof of] accommodation, employment, study or the like, abroad.

(ii) The Customs Administrations press release of 4 April 2011


53. On 4 April 2011 the Customs Administration issued a press release
entitled The use of vehicles with foreign licence plates in the Customs
Territory of the Republic of Croatia. The relevant part of that press release
reads as follows:
The Ministry of Finance Customs Administration, with a view to informing the
public of the applicable customs regulations and [in order] to prevent possible
irregularities or illegal acts due to ignorance ..., wishes by issuing the following press
release to inform the public of the rules regarding the use of vehicles with foreign
licence plates in the customs territory of the Republic of Croatia.
The use of foreign goods in the customs territory of the Republic of Croatia, in
particular cars with foreign licence plates, is permitted under the temporary
importation procedure. In terms of the customs regulations, the temporary importation
procedure, which is regulated by national legislation (sections 145-152 of the Customs
Act and sections 260-297 of the Decree on the implementation of the Customs Act)
24 AJA v. CROATIA JUDGMENT

and by the International Convention on Temporary Admission (the Istanbul


Convention), allows the temporary admission of goods with conditional exemption
from customs duties and taxes ...
In accordance with Annex C to the Convention on Temporary Admission, the right
to temporary importation of a vehicle with exemption from customs duties and taxes
may be granted under the following conditions:
Means of transport for private use:
- must be registered in a territory other than the territory of temporary admission,
- must be registered in the name of a person having a seat or domicile in the territory
of another state and
- must be imported and used by persons living in that territory.
This means that the right to temporary importation of means of transport for private
use (cars, vessels, motorcycles, etc.) with foreign registration belongs to persons with
a seat, domicile or habitual residence in the territory of another state.
Habitual place of residence is the place where a person, regardless of his or her
nationality, usually lives for more than six months in each calendar year for personal
or professional reasons or, in the case of an unemployed person, for personal reasons
that suggest [that there are] close ties between the person and the place where he or
she lives.
That is why, for example, a motor vehicle with foreign licence plates may in the
Republic of Croatia be driven exclusively by a foreign national with residence in the
country of registration, another foreign national having residence in a third country, or
by a Croatian national who has habitual place of residence abroad. [In those cases] the
vehicle may altogether (that is, irrespective of the fact that it may occasionally leave
the customs area of the Republic of Croatia) be present and used in ... Croatia for up
to six months in a twelve-month period, after which the vehicle has to leave the
customs area. A Croatian or foreign national who has habitual place of residence in ...
Croatia, must not use a vehicle with foreign registration plates in Croatia, regardless
of the fact he or she may possess a driving licence of the country of registration.
...
What is relevant in terms of exercising the rights set forth in Annex C to the
Convention on Temporary Admission is not the nationality but domicile or residence
of the person using the vehicle.
That means, for example, that a person who is both a Croatian and foreign national,
and has domicile and habitual residence in the Republic of Croatia, shall be
considered a domestic natural person.
If, therefore, a person with Croatian, foreign or dual nationality has habitual
residence in the customs territory of the Republic of Croatia, he or she must not drive
vehicles with foreign licence plates, that is, vehicles in respect of which customs duty,
excise tax and VAT have not been paid.
Otherwise [that person shall be] considered as committing a serious customs offence
which in the end, besides a fine, may entail the application of the protective measure
of confiscation of the vehicle as the object of the offence, and the collection of the
customs debt (the customs duty, VAT and the excise tax) [due on the importation] of
that vehicle. In particular, in supervising the temporary admission of vehicles in
accordance with Annex C to the Convention on Temporary Admission, during 2010
AJA v. CROATIA JUDGMENT 25

the Customs Administration carried out a total of 956 interventions [that is, spot-
checks], of which in 302 cases it found irregularities, and [collected] customs debts in
the total amount of HRK 5,664,943.11.

(iii) The Customs Administrations instruction of 1 June 2011


54. On 1 June 2011 the Customs Administration issued an Instruction on
the use of vehicles with foreign licence plates in the Republic of Croatia,
which was addressed to all custom offices as a practice direction. The
relevant part of that instruction reads as follows:
The following instruction is given with a view to removing doubts and
uncertainties and [in order to] harmonise procedures relating to the application of
Annex C to the Convention on Temporary Admission and the use of cars with foreign
licence plates in the customs territory of the Republic of Croatia:
Lawful use of foreign means of transport within the customs territory of the
Republic of Croatian is granted under the temporary importation procedure.
Temporary importation of means of transport, including motor vehicles, is provided
for in Annex C to the Convention on Temporary Admission.
In accordance with Annex C to the Convention on Temporary Admission, the right
to temporary importation of motor vehicles with exemption from customs duties and
taxes may be exercised under the following conditions:
Means of transport for private use:
- must be registered in a territory other than the territory of temporary importation,
- must be registered in the name of a person having a seat or domicile in the territory
of another state and
- must be imported and used by persons living in a territory other than the territory
of temporary importation.
This means that the right to the temporary importation of vehicles with foreign
registration for private use may be exercised by persons who have a seat, domicile or
habitual residence in the territory of another state. Thus, [only] persons who normally
live in the territory of a country other than the country of temporary importation may
benefit from the procedure of temporary importation of means of transport. In this
regard, for example, a motor vehicle with foreign licence plates may be driven in the
Republic of Croatia by:
- a foreign national with residence in the country of registration,
- a foreign national having residence in a third country,
- a Croatian national who has habitual residence (uobiajeno boravite) abroad.
In this connection elements such as employment or [otherwise] earning a living,
health insurance, etc. are the elements that may be indicative of habitual residence in a
certain country, which [however] does not mean that the existence or non-existence of
one of the conditions listed automatically constitutes [decisive] evidence of habitual
residence in that country.
...
It follows ... that nationality alone, or even temporary residence granted to a person
in a particular country, does not automatically entitle to or prohibit from the driving of
26 AJA v. CROATIA JUDGMENT

cars with foreign licence plates in the customs territory of the Republic of Croatia.
Rather, the persons in question have to prove their right to operate foreign vehicles by
the available documents. This means that credible evidence has to be furnished that
those persons ... do not live in the customs territory of the Republic of Croatia.
Thus, the fulfilment of the conditions for the use of foreign motor vehicles in the
customs territory of ... Croatia ... is to be assessed on a case-by-case basis, on the basis
of the available evidence, which the beneficiary of the temporary admission procedure
has to obtain and present.

(iv) Decisions of the Customs Administration and the Ministry of Finance and
the case-law of the Administrative Court
55. In the first-instance decision of the Customs Administration
no. UP/I-415-02/06-01/115 of 23 May 2006, which was upheld by the
second-instance decision of the Ministry of Finance UP/II-415-05/06-
01/700 of 6 July 2006, both authorities in interpreting the term person
resident referred to in Annex C to the Istanbul Convention relied on the
definition of fiscal domicile and habitual residence provided in the General
Tax Act (see paragraph 31 above). By its judgment no. Us-9157/2006-16 of
9 September 2009 the Administrative Court dismissed the subsequent action
for judicial review against those decisions, relying on the fact that the
plaintiff had registered domicile in Croatia.
56. In the second-instance decision of the Ministry of Finance UP/II-
471-01/07-01/176 of 9 January 2008, whereby it upheld the first-instance
decision of the Customs Administration no. UP/I-415-02/05-01/101 of
4 July 2007, the Ministry in interpreting the same term also relied on the
definition of fiscal domicile and habitual residence provided in the General
Tax Act (see paragraph 31 above). By its judgment no. Us-2367/2008-6 of
5 October 2010 the Administrative Court dismissed the subsequent action
for judicial review against those decisions. In so doing it referred to the
notion of fiscal domicile and habitual residence as defined in the General
Tax Act.
57. In its judgment no. Us-11421/2005-7 of 31 July 2008 the
Administrative Court relied on the definition of fiscal domicile and habitual
residence provided in the General Tax Act (see paragraph 31 above) when
interpreting the term person resident referred to in Annex C to the
Istanbul Convention .

B. The OECD Model Convention with Respect to Taxes on Income


and Capital

58. The OECD Model Convention with Respect to Taxes on Income and
Capital of 11 April 1977, also known as the OECD Model Convention on
Elimination of Double Taxation, is a soft law instrument adopted within
the Organisation for Economic Cooperation and Development in Europe,
which is intended to serve as a model for drafting bilateral agreements for
AJA v. CROATIA JUDGMENT 27

the avoidance of double taxation. The relevant part of the Model


Convention reads as follows:

CHAPTER I

SCOPE OF THE CONVENTION

Article 1

PERSONS COVERED
This Convention shall apply to persons who are residents of one or both of the
Contracting States.
...

CHAPTER II

DEFINITIONS
...

Article 4

RESIDENT
1. For the purposes of this Convention, the term resident of a Contracting State
means any person who, under the laws of that State, is liable to tax therein by reason
of his domicile, residence, place of management or any other criterion of a similar
nature ....
2. Where by reason of the provisions of paragraph 1 an individual is a resident of
both Contracting States, then his status shall be determined as follows:
a) he shall be deemed to be a resident only of the State in which he has a permanent
home available to him; if he has a permanent home available to him in both States, he
shall be deemed to be a resident only of the State with which his personal and
economic relations are closer (centre of vital interests);
b) if the State in which he has his centre of vital interests cannot be determined, or
if he has not a permanent home available to him in either State, he shall be deemed to
be a resident only of the State in which he has an habitual abode;
c) if he has an habitual abode in both States or in neither of them, he shall be
deemed to be a resident only of the State of which he is a national;
d) if he is a national of both States or of neither of them, the competent authorities
of the Contracting States shall settle the question by mutual agreement.
3. ...

C. Other relevant international law

59. Provisions identical to Article 4 the original title of which was


Fiscal Domicile of the OECD Convention are contained in Article 4 of
the United Nations Model Double Taxation Convention between Developed
28 AJA v. CROATIA JUDGMENT

and Developing Countries, as well as in all 55 bilateral agreements for the


avoidance of double taxation concluded by Croatia. For example, those
provisions are contained in Article 4 of the agreements with the Czech
Republic (Official Gazette International Agreements nos. 88/99 and 6/12,
which entered into force on 28 December 1999) and France (Official
Gazette International Agreements no. 7/04, which entered into force on
1 September 2005), as well as in Article 4 of the agreement concluded
between the former Yugoslavia and the United Kingdom (Official Gazette
of the Socialist Federal Republic of Yugoslavia International Agreements
no. 7/82), which entered into force on 16 September 1982 and applies to
Croatia by virtue of its notification of succession on 8 October 1991. In
those agreements the term resident (rsident) (in the agreements with
France and the Czech Republic), or fiscal domicile (in the agreement with
the United Kingdom) were translated into Croatian as rezident or (in the
agreement with the United Kingdom) fiskalni domicil. The term
permanent home (foyer dhabitation permanent) was translated as
prebivalite or, in the agreement with the United Kingdom, stalno mjesto
stanovanja. The term place of habitual abode (lieu de sjour habituel)
was translated as uobiajeno boravite.

V. RELEVANT COUNCIL OF EUROPE INSTRUMENTS

60. The relevant part of the Resolution (72) on the Standardisation of the
Legal Concepts of Domicile and of Residence, adopted by the
Committee of Ministers on 18 January 1972 at the 206th meeting of the
Ministers Deputies, reads as follows:
ANNEX

RULES
Domicile
No. 1. The concept of domicile imports a legal relationship between a person and a
country governed by a particular system of law or a place within such a country. This
relationship is inferred from the fact that that person voluntarily establishes or retains
his sole or principal residence within that country or at that place with the intention of
making and retaining in that country or place the centre of his personal, social and
economic interests. This intention may be inferred, inter alia, from the period of his
residence, past and prospective, as well as from the existence of other ties of a
personal or business nature between that person and that country or place.
No. 2. A persons domicile is regarded as continuing until another domicile is
acquired.
No. 3. ...
...
AJA v. CROATIA JUDGMENT 29

Residence
No. 7. The residence of a person is determined solely by factual criteria; it does not
depend upon the legal entitlement to reside.
No. 8. A person has a residence in a country governed by a particular system of law
or in a place within such a country if he dwells there for a certain period of time. That
stay need not necessarily be continuous.
No. 9. In determining whether a residence is habitual, account is to be taken of the
duration and the continuity of the residence as well as of other facts of a personal or
professional nature which point to durable ties between a person and his residence.
No. 10. The voluntary establishment of a residence and a persons intention to
maintain it are not conditions of the existence of a residence or an habitual residence,
but a persons intentions may be taken into account in determining whether he
possesses a residence or the character of that residence.

VI. RELEVANT EUROPEAN UNION LAW

61. In the official Croatian translation of the Councils Directive of


28 March 1983 on tax exemptions within the Community for certain means
of transport temporarily imported into one Member State from another
(Directive 83/182/EEC on tax exemptions for temporarily imported
vehicles) the term normal residence is translated into Croatian as
uobiajeno boravite.

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 7 OF THE CONVENTION

62. The applicant complained, under Article 6 1 of the Convention,


that his actions did not amount to an administrative offence and that the
domestic authorities had wrongly interpreted the term persons resident in
Article 5 of Annex C to the Istanbul Convention on Temporary Admission
by equating it with the term domicile as defined in the domestic
legislation.
63. The Government contested that argument.
64. The Court, being master of the characterisation to be given in law to
the facts of the case, considers, having regard to its case-law
(see, for example, Korbely v. Hungary [GC], no. 9174/02, ECHR 2008; and
Vasiliauskas v. Lithuania [GC], no. 35343/05, 20 October 2015), that this
complaint falls to be examined exclusively under Article 7 of the
Convention (see Nadtochiy v. Ukraine, no. 7460/03, 31, 15 May 2008),
which reads as follows:
30 AJA v. CROATIA JUDGMENT

1. No one shall be held guilty of any criminal offence on account of any act or
omission which did not constitute a criminal offence under national or international
law at the time when it was committed. Nor shall a heavier penalty be imposed than
the one that was applicable at the time the criminal offence was committed.
2. This article shall not prejudice the trial and punishment of any person for any act
or omission which, at the time when it was committed, was criminal according to the
general principles of law recognised by civilised nations.

A. Admissibility

65. The Government disputed the admissibility of this complaint by


arguing that the applicant had failed to exhaust domestic remedies.

1. The parties submissions


66. The Government argued that neither during the administrative
offence proceedings nor in his constitutional complaint had the applicant
complained of a violation of Article 7 of the Convention. In particular, in
his constitutional complaint the applicant had alleged violations of his
constitutional rights to equality before the law and a fair hearing, which
rights corresponded to those guaranteed by Article 6 of the Convention.
67. The applicant replied that he had properly exhausted domestic
remedies.

2. The Courts assessment


68. The Court first notes that section 65(1) of the Constitutional Court
Act requires complainants to indicate in their constitutional complaints the
constitutional right which has allegedly been violated, as well as the
relevant provision of the Constitution guaranteeing that right. Likewise,
section 71(1) of the same Act provides that the Constitutional Court
examines only violations of the constitutional rights alleged in the
constitutional complaint (see paragraph 27 above). It is evident that the
applicant in his constitutional complaint did not rely on Article 7 of the
Convention. Nor did he rely on Article 31 paragraph 1 of the Constitution,
which is the provision that arguably corresponds to Article 7 of the
Convention. Instead, he referred principally to Article 14 paragraph 2,
Article 26 and Article 29 paragraph 1 of the Constitution, which are the
provisions that largely correspond to Article 6 1 and Article 14 of the
Convention (see paragraphs 24 and 26 above).
69. However, the Court also notes that the rule that the Constitutional
Court examines only the violations of the constitutional rights alleged in the
constitutional complaint is not as absolute as the Government suggested. In
particular, it is clear from the Constitutional Courts decision no. U-III-
363/1999 of 9 July 2001 (see paragraph 28 above) that in certain cases it is
not necessary for persons lodging a constitutional complaint to refer to the
AJA v. CROATIA JUDGMENT 31

relevant Articles of the Constitution, as sections 65(1) and 71(1) of the


Constitutional Court Act may suggest. Sometimes it may be sufficient for a
violation of a constitutional right to be apparent from the complainants
submissions and the case file.
70. Therefore, while it is true that in his constitutional complaint the
applicant did not explicitly rely on Article 7 of the Convention or the
corresponding provision of the Constitution, he did argue that, because he
lived abroad, he had not committed any offence by entering Croatia in his
car, and that his conviction for the administrative offence in question had
resulted from the erroneous interpretation of the term persons resident in
Annex C to the Istanbul Convention by the domestic authorities, which had,
in his view, wrongly equated it with the term domicile as defined in the
domestic legislation (see paragraph 24 above).
71. This means that before the Constitutional Court the applicant had
expressed his grievances in a manner which leaves no doubt that the same
complaint was subsequently submitted to the Court (see paragraph 24 above
and compare with the applicants arguments summarised in paragraph 3 and
62 above and paragraphs 74-77 below; and contrast with Merot d.o.o. and
Storitve Tir d.o.o. v. Croatia (dec.), nos. 29426/08 29737/08, 36,
10 December 2013). By having therefore raised in substance the same issue
at the domestic level, the applicant provided the national authorities with the
opportunity which is in principle intended to be afforded to Contracting
States by Article 35 1 of the Convention, namely of putting right the
violations alleged against them (see Glasenapp v. Germany, 28 August
1986, 44-46, Series A no. 104; and Lelas v. Croatia, no. 55555/08, 45
and 47-52, 20 May 2010).
72. It follows that the Governments objection as to the exhaustion of
domestic remedies must be rejected.
73. The Court further notes that this complaint is not manifestly ill-
founded within the meaning of Article 35 3 (a) of the Convention. It also
notes that it is not inadmissible on any other grounds. It must therefore be
declared admissible.

B. Merits

1. The parties submissions

(a) The applicant


74. The applicant reiterated his main argument that he lived in Prague
and thus, in accordance with Annex C to the Istanbul Convention on
Temporary Admission, he had not been bound to pay the taxes in question
when he had visited Croatia in his car, duly registered in the Czech
Republic. If he had been obliged to do so, he should and would have been
stopped by Croatian customs officials at the border crossing when entering
32 AJA v. CROATIA JUDGMENT

Croatia and instructed either to pay those taxes or to return to the Czech
Republic. Therefore, his failure to pay the customs debt for the alleged
importation of his car had not been in breach of customs regulations and
thus could not constitute an offence. Yet, he had been convicted of the
customs-related administrative offence specified in section 241(1)
subparagraph 10 of the Customs Act (see paragraphs 22-23 and 29 above).
That was so only because the domestic authorities had misinterpreted the
term persons resident in the Istanbul Convention as persons having
domicile, which had a different meaning in the domestic legislation. He
explained that the Istanbul Convention, in its official text, did not refer to
domicile but to living abroad and that the meaning given to certain legal
terms in domestic legislation could not be relied on in interpreting the same
or similar terms used in international agreements. Therefore, the fact that
while living in Prague he could have, in the eyes of Croatian authorities,
retained his domicile in Croatia was not relevant. What mattered for the
application of the Istanbul Convention was whether he lived in the Czech
Republic or in Croatia.
75. In the applicants view it was evident from the documents produced
in the proceedings both before the domestic authorities and before the Court
that he resided in the Czech Republic. In particular, those documents
showed that: (a) he had been living in Prague since 18 November 2000
when the Czech authorities had granted him a visa for an extended stay;
(b) he had been granted the right to reside permanently in the Czech
Republic on 18 February 2008; (c) he did not pay income tax in Croatia;
(d) he had health insurance in the Czech Republic and not in Croatia; (e) he
rented a flat in Prague; and (f) his wife lived in Prague, where she worked
for a Czech company through which he had a pension and health insurance.
76. The applicant further submitted that it was well known that on a
daily basis, and especially at weekends and during holidays, thousands and
sometimes hundreds of thousands of Croatian citizens, mostly (but not only)
guest-workers temporarily employed in Austria, Germany, Switzerland,
Italy or neighbouring countries, entered Croatia in their cars registered
abroad. In his view, the Government had not explained how all those
people, who were in the same or a similar situation to his, did so without
being fined and having their cars impounded.
77. Lastly, the applicant added that he was disabled, with a degree of
disability of 100%, and could not walk without help. The car for the
importation of which he had been fined and which had been impounded was
specially adapted to his needs and in fact served as an orthopaedic aid for
him.

(b) The Government


78. The Government argued that: (a) the applicant had been convicted of
a customs-related administrative offence prescribed in the relevant domestic
AJA v. CROATIA JUDGMENT 33

legislation after the relevant domestic authorities had established that all
elements of the offence existed in his case; (b) the applicant did not tempore
criminis, meet the conditions for temporary admission, that is, for
exemption from payment of customs duties, set out in the Istanbul
Convention because, having his domicile in Zagreb, he could not be
considered a person resident outside Croatia for the purposes of that
Convention; (c) the Croatian authorities had consistently interpreted the
term person resident in the Istanbul Convention in accordance with the
definition of domicile provided in the relevant domestic legislation; and
(d) the applicant had subsequently de-registered his domicile exclusively in
order to avoid paying the taxes levied on the importation of his car and the
fine imposed.
79. In particular, the Government submitted that the applicant had been
found guilty of the customs-related administrative offence defined in section
241(1) subparagraph 10 of the Customs Act (see paragraph 29 above) and
had received a fine within the statutory range only after the relevant
domestic authorities had found in the administrative offence proceedings
that his acts had all the elements of the offence in question.
80. As regards the applicants main argument that he had not been
required to pay the customs duty for the importation of his car and thus had
not committed any offence, and that his conviction for the administrative
offence in question had resulted from a wrong interpretation by the
domestic authorities of the term persons resident in the Istanbul
Convention on Temporary Admission (see paragraphs 62 and 74 above), the
Government noted that Article 1 of the Istanbul Convention did not define
the (autonomous) meaning of that term, as it did with some other terms
employed in that Convention (see paragraph 45 above). In the
Governments view, that meant that it was left to the States Parties to the
Istanbul Convention to give meaning to that term themselves, that is, to
interpret it independently, in accordance with their own legislation. The
Croatian authorities had decided to interpret the term by equating it with the
notion of domicile (prebivalite), which, according to the Domicile and
Residence of Citizens Act, is the place where a citizen has settled with an
intention of permanently living there (see paragraph 32 above). Those
authorities had considered the notion of domicile the most appropriate
because it was the only one that denoted more permanent connection of
Croatian citizens with their homeland.
81. The Government also emphasised that the Croatian authorities had
uniformly and consistently interpreted the term persons resident in the
Istanbul Convention by equating it with the notion of domicile as defined in
the Domicile and Residence of Citizens Act (see paragraphs 47-50 above).
82. The Government further explained that temporary admission as
provided for in Article 5 of Annex C to the Istanbul Convention
(see paragraph 45 above), that is, the privilege of not having to pay customs
34 AJA v. CROATIA JUDGMENT

duties, applied only to those who temporarily brought a car into the State for
their personal use, while having their domicile or seat in a State different
from the State into which the car was being brought and having the car
registered in that State. Furthermore, section 241(1) subparagraph 10 of the
Customs Act prescribed that treating goods which did not meet the
conditions for temporary admission set forth in the Istanbul Convention as if
they did was an administrative offence punishable by a fine
(see paragraph 29 above). Given that at the time of the commission of the
offence, that is, when the applicant had entered Croatia in his car with
foreign licence plates without paying the relevant taxes, he had been a
Croatian citizen and had his domicile in Croatia (see paragraph 6 above), he
had not satisfied the conditions for temporary admission set forth in
Article 5 of Annex C to the Istanbul Convention. By the same token, his
failure to pay the taxes due on the importation of his car had also made him
liable for the administrative offence specified in section 241(1)
subparagraph 10 of the Customs Act (see paragraph 29 above) of which he
had eventually been convicted.
83. Lastly, the Government stated that the applicant had been or should
have been aware that his acts constituted an administrative offence. In
particular, the applicants statement that he had entered Croatia with the
intention of de-registering his domicile was (see paragraph 8 above), in the
Governments view, crucial evidence that he had known that having his
domicile in Croatia made him ineligible for temporary admission and that
by bringing his car to Croatia he had breached customs regulations. In fact,
the Government argued, the applicant had never had the intention of de-
registering his domicile. Rather, his real intention had been to continue
living in Croatia, where he had accommodation and where his family lived,
and to go only occasionally to the Czech Republic. He had de-registered his
domicile in Croatia only to avoid paying the customs debt and escape
liability for it. Thus, even though he had allegedly entered Croatia in order
to de-register his domicile, he had not done so until 17 June 2008
(see paragraph 10 above), that is, six days after entering (see paragraph 8
above), and one day after the police had impounded his vehicle and the
customs proceedings against him had commenced (see paragraphs 9 and 12
above). Moreover, on 15 September 2008, that is, only two months after he
had de-registered his domicile, the applicant had re-registered it at the same
address (see paragraph 11 above).
84. For these reasons the Government invited the Court to find that there
had been no violation of Article 7 of the Convention.
AJA v. CROATIA JUDGMENT 35

2. The Courts assessment

(a) Applicability
85. Even though the Government did not contest the applicability of
Article 7 to the facts of the present case, the Court nevertheless considers
that it has to examine this issue of its own motion.
86. In order to determine whether Article 7 is applicable, the Court has
to determine whether the offence for which the applicant was fined was
criminal within the meaning of that Article. In so doing the Court will
have regard to the three alternative criteria laid down in the Engel case
(see Engel and Others v. the Netherlands, 8 June 1976, 82, Series A
no. 22, and Jussila v. Finland [GC], no. 73053/01, 30-31, ECHR
2006-XIV): (a) the classification of the offence under the domestic law,
(b) the nature of the offence, and (c) the nature and degree of severity of the
penalty that the person concerned risks incurring. The first criterion is of
relative weight and serves only as a starting-point. If domestic law classifies an
offence as criminal, then this will be decisive. Otherwise the Court will look
behind the national classification and examine the offence in the light of the
second and/or third criteria. Even though these criteria were initially
developed for the purposes of determining the applicability of Article 6 of
the Convention under its criminal head, they are equally pertinent to the
issue of the applicability of Article 7 (see Nadtochiy, cited above, 32).
87. As to the legal classification of the offence under the domestic law,
the Court notes that the behaviour for which the fine was imposed on the
applicant is formally classified as an administrative rather than a criminal
offence under Croatian law. This follows from the fact that the fine imposed
on the applicant was based on section 241(1) of the Customs Act
(see paragraph 29 above) and not on provisions of the Criminal Code; that
such a fine is not entered in a persons criminal record; and that its amount
does not depend on income, as in criminal law. However, since the
classification of the offence under the domestic law is of relative value only,
the Court must further examine the offence in question in the light of the
second and third criteria mentioned above (see the preceding paragraph).
88. As to the nature of the offence in question, the Court notes that the
offence for which the applicant was fined was defined in the Customs Act
(see paragraph 29 above), that is, in legislation that applied to the whole
population (to anyone who crossed the border) and not just to a particular
group. What is more, the fine imposed on the applicant was punitive in
nature as it was not intended to serve as pecuniary compensation for unpaid
customs duties but as a penalty to deter reoffending. The Court finds these
elements sufficient for a conclusion that the purported customs-related
administrative offence was of a criminal character and thus attracted the
guarantees of Article 7 of the Convention (see, mutatis mutandis,
Nadtochiy, cited above, 21-22, and Jussila, cited above, 38).
36 AJA v. CROATIA JUDGMENT

89. This conclusion is further reinforced by the fact that the penalty the
applicant risked incurring was rather severe as it amounted to HRK
100,0003 (see section 241(1) of the Customs Act in paragraph 29 above), it
being understood that the actual penalty imposed on the applicant is relevant
but cannot diminish the importance of what was initially at stake
(see, for example, Ezeh and Connors v. the United Kingdom [GC],
nos. 39665/98 and 40086/98, 120, ECHR 2003-X).

(b) As to whether there was a violation of Article 7 of the Convention

(i) General principles


90. The Court reiterates th e relevant principles summarised in the
Vasiliauskas case (cited above, 153-155):
153. ... the guarantee enshrined in Article 7, which is an essential element of the
rule of law, occupies a prominent place in the Convention system of protection, as is
underlined by the fact that no derogation from it is permissible under Article 15 in
time of war or other public emergency. It should be construed and applied, as follows
from its object and purpose, in such a way as to provide effective safeguards against
arbitrary prosecution, conviction and punishment (...).
154. Accordingly, Article 7 is not confined to prohibiting the retrospective
application of the criminal law to an accuseds disadvantage: it also embodies, more
generally, the principle that only the law can define a crime and prescribe a penalty
(nullum crimen, nulla poena sine lege) and the principle that the criminal law must
not be extensively construed to an accuseds detriment, for instance by analogy. It
follows from these principles that an offence must be clearly defined in the law, be it
national or international. This requirement is satisfied where the individual can know
from the wording of the relevant provision and, if need be, with the assistance of the
courts interpretation of it and with informed legal advice what acts and omissions
will make him criminally liable. The Court has thus indicated that when speaking of
law Article 7 alludes to the very same concept as that to which the Convention
refers elsewhere when using that term, a concept which comprises written as well as
unwritten law and implies qualitative requirements, notably those of accessibility and
foreseeability (...).
155. The Court reiterates that however clearly drafted a legal provision may be, in
any system of law, including criminal law, there is an inevitable element of judicial
interpretation. There will always be a need for elucidation of doubtful points and for
adaptation to changing circumstances. Indeed, in the Convention States, the
progressive development of the criminal law through judicial interpretation is a well-
entrenched and necessary part of legal tradition. Article 7 of the Convention cannot be
read as outlawing the gradual clarification of the rules of criminal liability through
judicial interpretation from case to case, provided that the resultant development is
consistent with the essence of the offence and could reasonably be foreseen (...).
91. The Court further reiterates that its task is not to review the relevant
law and practice in abstracto, but to determine whether the manner in which
they were applied to, or affected, the applicant gave rise to a violation of the

3
Approximately, EUR 14,010 at the time.
AJA v. CROATIA JUDGMENT 37

Convention (see, for example, Religionsgemeinschaft der Zeugen Jehovas


and Others v. Austria, no. 40825/98, 90, 31 July 2008). In this connection
it refers to the view of the former Commission, best summarised in the case
of J.J.M. v. the United Kingdom (no. 4681/70, Commission decision of
3 October 1972, Collection 43, p. 1; see also X. v. Federal Republic of
Germany, no. 1169/61 Commission decision of 24 September 1963,
Yearbook 6, p.p. 520; and 588; X. v. Austria, no. 1852/63, Commission
decision of 22 April 1965, unreported), according to which:
Although it is not normally for the Commission to ascertain the proper
interpretation of municipal law by national courts, the case is otherwise in matters
where the Convention expressly refers to municipal law, as it does in Article 7. Under
Article 7 the application of the provision of municipal penal law to an act not covered
by the provision in question directly results in a conflict with the Convention, so that
the Commission can and must take cognisance of allegations of such false
interpretation of municipal law. The Commissions supervisory function, therefore,
consists in making sure that, at the moment when the accused person performed the
act which led to his being prosecuted, there was in force a legal provision which made
that act punishable and that the punishment imposed does not exceed the limits fixed
by that provision. ... [T]his supervisory function further consists in considering
whether the national court, in reaching its decision, has not unreasonably interpreted,
and applied to the applicant, the municipal law concerned.
92. This view was reaffirmed by the Court in the case of
Kononov v. Latvia, where it held that while it was primarily for the national
authorities, notably the courts, to resolve problems of interpretation of
domestic legislation, so that the Courts role was confined to ascertaining
whether the effects of such an interpretation were compatible with the
Convention, the position was different and the Courts powers of review
greater when it was not the domestic legislation but the Convention itself, in
particular Article 7, which expressly referred to the domestic law, that is,
required that there should be a legal basis for a conviction and sentence. In
such cases, a failure to comply with the domestic legislation could in itself
entail a violation of the Convention. Accordingly, in such circumstances the
Court had to have jurisdiction to decide whether the relevant provision of
criminal law had been complied with as its application to an act not covered
by that provision would directly result in a conflict with Article 7 of the
Convention. In the Courts view, to accord it a lesser power of review
would render Article 7 devoid of purpose. The Court also held that the same
principle applied to situations where the domestic courts had applied
international law (see Kononov v. Latvia [GC], no. 36376/04, 198, ECHR
2010, with further reference to Kononov v. Latvia, no. 36376/04, 110,
24 July 2008, that is, to the Chamber judgment in the same case).
(ii) Application of the above principles to the present case
93. In the light of the above principles concerning the scope of its
supervision, the Court considers that its task in the present case is to
38 AJA v. CROATIA JUDGMENT

examine whether the relevant law was foreseeable, that is, whether the
applicants act, at the time when it was committed, constituted an
administrative offence defined with sufficient precision by domestic and/or
international law (see, mutatis mutandis, Korbely, cited above, 73) to be
able to guide the applicants behaviour and prevent arbitrariness. In so doing
the Court must ascertain whether the applicant could have known from the
wording of the relevant provision and, if need be, with the assistance of
the domestic authorities interpretation of it and with informed legal advice
what acts or omissions would make him liable for the offence
(see, mutatis mutandis, Vasiliauskas, cited above, 154). Given that
foreseeability also requires that a rule affords a measure of protection
against arbitrary interferences by the public authorities (see Centro Europa
7 S.r.l. and Di Stefano v. Italy [GC], no. 38433/09, 143, ECHR 2012), the
Court must also ascertain whether the relevant law was sufficiently clear to
provide, in accordance with the object and purpose of Article 7 of the
Convention, effective safeguards against arbitrary prosecution, conviction
or punishment (see Vasiliauskas, cited above, 153).
94. In this connection the Court first observes that the applicant was
found guilty of, and fined for, having committed the administrative offence
defined in section 241(1) subparagraph 10 of the Customs Act
(see paragraph 29 above). That provision prohibited the importation of
goods without payment of the relevant customs duties and taxes under the
pretext that the imported goods satisfied the criteria for the exemption
known as temporary admission. Its wording suggests that it was a blanket
provision, that is, a legal norm which should have been construed in the
light of the relevant provisions on temporary admission contained in the
Istanbul Convention or elsewhere in the Customs Act.
95. The Court further observes that Article 5 of Annex C to the Istanbul
Convention on Temporary Admission provides that temporary admission is
to be granted in respect of those vehicles for private use which are:
(a) registered in a territory other than that of temporary admission in the
name of a person established or resident in a territory other than that of
temporary admission, and (b) imported and used by persons resident in such
a territory (see paragraph 45 above).
96. Given that at the time he brought his car into Croatia, the applicant
had his domicile registered in Croatia but, at the same time, had been
granted the right to reside permanently in the Czech Republic
(see paragraphs 6 and 8 above), the crucial question is whether he was to be
considered a resident of Croatia (or of the Czech Republic) for the purposes
of Article 5 of Annex C of the Istanbul Convention.
AJA v. CROATIA JUDGMENT 39

() As regards the issue whether the wording of the relevant provision was
sufficiently clear
97. In this regard, it is first to be noted that the term persons resident
appears twice in the text of Article 5 of Annex C to the Istanbul Convention
and that in the Croatian version of that Convention, published in the Official
Gazette International Agreements, the same term is translated on its first
occurrence as osobe s prebivalitem (persons having domicile) and on
its second occurrence as osobe koje ive (persons living or persons
who live) (see paragraphs 45-46 above). This inconsistency in translation
indeed makes the meaning of the term in question ambiguous as it could
mean either domicile or residence, it being understood that those terms
legally do not have the same meaning not only under Croatian law
(see paragraphs 31-32 above) but also in a number of countries (see the
relevant Council of Europe instrument in paragraph 60 above). This
ambiguity is further compounded by the fact that, from a strictly linguistic
point of view, the more accurate translation into Croatian of the English
term persons resident or the French term personnes rsidant appearing
in the original versions of the Istanbul Convention is osobe s boravitem
(persons having residence) rather than osobe s prebivalitem (persons
having domicile). Croatian versions or translations of international or
European law instruments that refer to the same or similar terms do not
provide any assistance in this matter (see paragraphs 59 and 61 above).
Therefore, in the Courts view, the wording of the relevant provision, and
particularly its official translation into Croatian, gives rise to uncertainty
and ambiguity as to who may benefit from the exemption, more specifically
whether the decisive element is domicile or residence.
98. Having regard to its case-law in the matter (see paragraphs 90 and 93
above), the Court must further examine whether the meaning of the term
persons resident in the text of Article 5 of Annex C to the Istanbul
Convention was elucidated through an interpretation by the domestic
authorities.
() As regards the issue whether the meaning of the relevant provision was
clarified through interpretation by the domestic authorities
99. The Government argued (see paragraph 80 above) that, because the
Istanbul Convention in its Article 1 did not provide an autonomous
definition of the term persons resident, it was left to the States to give
meaning to that term themselves, and that Croatian authorities had decided
to interpret the term by equating it with the notion of domicile
(prebivalite). In their view any ambiguity as to the meaning of the term
persons resident had been dispelled by the fact that those authorities had
uniformly and consistently interpreted it as persons having domicile,
where the notion of domicile was construed in the light of the relevant
domestic legislation, in particular with regard to the definition of domicile
40 AJA v. CROATIA JUDGMENT

in the Domicile and Residence of Citizens Act (see paragraphs 80-81


above).
100. In this connection the Court first notes that the practice submitted
by the Government (see paragraphs 47-50 above) seems to suggest that the
Customs Administration, the High Court for Administrative Offences and
the Administrative Court in the period between 18 January 2006 and
18 May 2011 interpreted the term persons resident in Article 5 of
Annex C to the Istanbul Convention as persons having domicile, and in so
doing referred to the definition of domicile provided in the Domicile and
Residence of Citizens Act. However, the decision of the Customs
Administration of 23 May 2006, the decisions of the Ministry of Finance of
6 July 2006 and 9 January 2008 and the judgments of the Administrative
Court of 31 July 2008 and 9 September 2009 (see paragraphs 55-57 above)
appear to suggest that the same term is to be interpreted in accordance with
the notions of fiscal domicile and habitual residence as defined in the
General Tax Act (see paragraph 31 above). Moreover, the opinions of the
Customs Administration issued in the period between 19 December 2006
and 10 January 2013 (see paragraphs 51-52 above), as well as its press
release of 4 April 2011 (see paragraph 53 above) and instruction of 1 June
2011 (see paragraph 54 above) indicate that the term in question is to be
understood as meaning persons having habitual residence and that
vehicles with foreign licence plates driven in the territory of Croatia by
Croatian nationals who have their habitual residence abroad are to be
exempted from import duties (see paragraphs 51-54 above). What is more,
the Instruction of 1 June 2011 states in its introductory part that it was
issued with a view to removing doubts and uncertainties and in order to
harmonise procedures relating to the application of Annex C to the Istanbul
Convention in the context of the use of cars with foreign licence plates in
the customs territory of Croatia (see paragraph 54 above).
101. If the term persons resident referred to in Article 5 of Annex C to
the Istanbul Convention is to be understood as meaning persons having
habitual residence (rather than persons having (registered) domicile), as the
above opinions, the press release and the instruction of the Customs
Administration suggest, then the outcome of the applicants case could have
been different. That is so because in the proceedings the applicant
complained of the domestic authorities had established that he did not at the
relevant time pay income tax or have health insurance in Croatia, and that
he was in possession of a valid residence permit issued by the Czech
authorities (see paragraphs 20 and 22-23 above). Under the Czech law
(see paragraph 42 above) that permit could not have been granted if in the
five years before obtaining it (18 February 2008 see paragraph 6 above)
the applicant had been absent from the Czech Republic for more than six
consecutive months, or for more than ten months altogether. Against this
AJA v. CROATIA JUDGMENT 41

factual background it was at least arguable that at the time he did have
habitual residence in the Czech Republic.
102. In view of the above it cannot but be concluded that the practice of
the domestic authorities in interpreting the term persons resident in
Article 5 of Annex C to the Istanbul Convention was inconsistent at the time
when the applicant allegedly committed the offence.
103. In this connection the Court finds it evident that an interpretation
capable of clarifying the meaning of an otherwise insufficiently clear
provision which serves as the legal basis for an offence must, in order to
comply with the requirements of Article 7, result from a practice (case-law)
of the domestic authorities which is consistent. That is so because an
inconsistent case-law lacks the required precision to avoid all risk of
arbitrariness and enable individuals to foresee the consequences of their
actions (see paragraph 93 above).
104. This principle was initially enunciated in the context of complaints
under Article 1 of Protocol No. 1 to the Convention for the purposes of
establishing whether an interference with the right of property was
foreseeable and thus provided for by law within the meaning of that
Article (see Belvedere Alberghiera S.r.l. v. Italy, no. 31524/96, 58, ECHR
2000-VI; Carbonara and Ventura v. Italy, no. 24638/94, 65, ECHR
2000-VI; Mullai and Others v. Albania, no. 9074/07, 115-117, 23 March
2010; Saghinadze and Others v. Georgia, no. 18768/05, 116-118,
27 May 2010; Brezovec v. Croatia, no. 13488/07, 67, 29 March 2011; and
Mati and Polonia d.o.o. v. Serbia (dec.), no. 23001/08, 47, 23 June
2015). In an even more specific context of taxation, under the same Article,
the Court has also held that the lack of the required clarity and precision of
the domestic law, offering divergent interpretations on an important fiscal
issue, upset the requirement of the quality of law under the Convention
and did not provide adequate protection against arbitrary interference by the
public authorities with property rights (see Shchokin v. Ukraine,
nos. 23759/03 and 37943/06, 56, 14 October 2010; and Serkov v. Ukraine,
no. 39766/05, 42, 7 July 2011).
105. The Court considers that this principle applies a fortiori in the
context of Article 7 of the Convention (see Mati and Polonia d.o.o., cited
above, 50), given that its object and purpose is to provide effective
safeguards against arbitrary prosecution, conviction or punishment
(see, among many other authorities, Vasiliauskas, cited above, 153). No
person should be forced to speculate, at peril of conviction, whether his or
her conduct is prohibited or not, or to be exposed to unduly broad discretion
of the authorities, in particular if it was possible, either by drafting
legislation in more precise terms or through judicial interpretation, to
specify the relevant provision in a way that would dispel uncertainty.
42 AJA v. CROATIA JUDGMENT

() Conclusion
106. In conclusion, the Court reiterates that the wording of Article 5 of
Annex C to the Istanbul Convention, and its Croatian translation in
particular, gives rise to uncertainty and ambiguity (see paragraph 97 above),
and that the interpretation of that provision by the domestic authorities was
at the relevant time inconsistent (see paragraph 100-102 above) and
therefore lacked the required precision. As a result thereof, the applicant
was, even with informed legal advice, unable to distinguish between
permissible and prohibited behaviour and thus unable to foresee, with the
degree of certainty required by Article 7 of the Convention, that entering
Croatia in his car, while arguably having a habitual residence in the Czech
Republic, would constitute an offence (see paragraphs 93 and 104-105
above). By the same token, the room left to those authorities for the
interpretation and application of Article 5 of Annex C to the Istanbul
Convention was too wide to provide effective safeguards against arbitrary
prosecution, conviction or punishment (see paragraph 93 above).

II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 TO


THE CONVENTION

107. The applicant also complained, without relying on any provision of


the Convention or its Protocols, about the confiscation and sale of his car.
108. The Court considers that this complaint falls to be examined under
Article 1 of Protocol No. 1 to the Convention, which reads as follows:
Every natural or legal person is entitled to the peaceful enjoyment of his
possessions. No one shall be deprived of his possessions except in the public interest
and subject to the conditions provided for by law and by the general principles of
international law.
The preceding provisions shall not, however, in any way impair the right of a State
to enforce such laws as it deems necessary to control the use of property in
accordance with the general interest or to secure the payment of taxes or other
contributions or penalties.
109. The Government disputed the admissibility of this complaint on
two grounds. They argued that the applicant had failed to exhaust domestic
remedies, and that this complaint was, in any event, manifestly ill-founded.
110. The Court does not find it necessary to reproduce the parties
arguments in detail as this complaint is in any event inadmissible for the
following reasons.
111. In his observations of 22 October 2011 the applicant explained that
before the Court he did not complain of the above-described administrative
proceedings (see paragraphs 12-18 above) but only of the administrative
offence proceedings (see paragraphs 19-25 above). In particular, in reply to
the Governments non-exhaustion objection the applicant unequivocally
stated:
AJA v. CROATIA JUDGMENT 43

... the applicant contests before the Court only the decisions of the State authorities
and courts relating to the customs offence, but does not contest the decisions of the
administrative and judicial authorities adopted in the administrative proceedings
concerning payment of the custom debt.
112. That being so, and given that the confiscation and sale of the
applicants car occurred in the context of the administrative proceedings and
not in the (administrative offence) proceedings actually complained of by
the applicant, it follows that this complaint is inadmissible under
Article 35 3 (a) of the Convention as manifestly ill-founded and must be
rejected pursuant to Article 35 4 thereof.

III. APPLICATION OF ARTICLE 41 OF THE CONVENTION

113. 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.
114. The Court reiterates that a judgment in which it finds a breach
imposes on the respondent State a legal obligation to put an end to the
breach and make reparation for its consequences. If national law does not
allow or allows only partial reparation to be made, Article 41 empowers
the Court to afford the injured party such satisfaction as appears to it to be
appropriate (see Iatridis v. Greece (just satisfaction) [GC], no. 31107/96,
32-33, ECHR 2000-XI). In this connection the Court first notes that,
having regard to section 82(3) of the Administrative Offences Act
(see paragraph 38 above), the applicant can now, relying on sections 214-
216 of the same Act (see paragraph 39 above) in conjunction with section
502(1) of the Criminal Procedure Act (see paragraph 41 above), file a
petition with the High Court for Administrative Offences for the reopening
of the administrative offence proceedings in respect of which the Court has
found a violation of Article 7 of the Convention. The Court also notes that
under section 220 of the Administrative Offences Act
(see paragraph 40 above), read in conjunction with section 509 of the
Criminal Procedure Act (see paragraph 41 above), the State Attorney must
lodge a request for the protection of legality if a judicial decision adopted in
administrative offence proceedings entailed a violation of human rights.
115. Given the nature of the applicants complaint and the reasons for
which it has found a violation of Article 7 of the Convention, the Court
considers that in the present case the most appropriate way of redressing it
would be to reopen the proceedings complained of.
116. Having regard to the foregoing, and given that the applicants
representative did not submit a claim for just satisfaction, the Court
considers that there is no call to award him any sum on that account.
44 AJA v. CROATIA JUDGMENT

FOR THESE REASONS, THE COURT, UNANIMOUSLY,


1. Declares the complaint under Article 7 admissible and the remainder of
the application inadmissible;

2. Holds that there has been a violation of Article 7 of the Convention.

Done in English, and notified in writing on 4 October 2016, pursuant to


Rule 77 2 and 3 of the Rules of Court.

Stanley Naismith Il Karaka


Registrar President