CCM examined the constitutionality of certain provisions of the Law on entrepreneurship and enterprises

On 6 March 2018, the Constitutional Court delivered a judgment in respect of the exception of unconstitutionality of certain provisions of section 4 and section 5 of Article 10 of the Law no. 845-XII of 3 January 1992 on Entrepreneurship and Enterprises (Complaint no. 10g/2018).

Circumstances of the case

The case originated in the exception of the unconstitutionality of the words "unlicensed activity" in section 4 and of the words "as well as which carries out the settlement in cash and via transfer through intermediaries" in section 5, Article 10 of the Law no. 845 of 3 January 1992 on Entrepreneurship and Enterprises, raised by the lawyer Vitalie Carmanschi within the case file no. 3-516/17, pending before Chişinău Court based in Buiucani district.

Considering that by the Judgment no. 2 of 30 January 2018 the Constitutional Court declared the challenged provisions of section 4, Article 10 of the Law as unconstitutional, the exception of unconstitutionality was declared inadmissible in this part.

Referring to section 5, Article 10, the author of the exception of unconstitutionality claimed, in essence, that by penalizing the carrying out of settlements in cash and via transfers through intermediaries, under the Law on Entrepreneurship and Enterprises, given the fact that the same facts are sanctioned also under the Contravention Code, as well as by setting a fixed-scale sanction failing to provide any individualization, the provisions of Articles 1 para.(3), 21, 23 and 46 of the Constitution are infringed.

The complaint was examined by the Constitutional Court in the following composition:

Mr. Aurel BĂIEŞU, Chair of the hearing,

Mr. Igor DOLEA,

Ms Victoria IFTODI,

Mr Veaceslav ZAPOROJAN, justices,

Conclusions of the Court

Having heard the arguments of the parties and having examined the case files, the Court noted that the right of every individual to know his/her rights and duties, enshrined in Article 23 para. (2) of the Constitution implies the need to adopt, by the legislator, accessible, predictable and clear laws so that the principle of legality and legal certainty is not an illusory one.

The Court held that the principle of legality and legal certainty is essential to guarantee the trust in the rule of law, which is enshrined in Art. 1 para. (3) of the Constitution, and constitutes a means of protection against arbitrariness.

In the present case, the Court found that, under section 5, Art. 10 of the Law on Entrepreneurship and Enterprises, in case of carrying out settlements in cash and via transfers through intermediaries, the State Tax Service applies to enterprises and organizations, irrespective of the type of their ownership and legal form of organization, financial sanctions in proportion of 10 percent of the amounts paid.

The Court noted that the cases of carrying out unlawful settlements in cash and via transfers through intermediaries are also sanctioned under Art. 293 of the Contravention Code.

The Court thus found that the sanctioning of unlawful settlements through intermediaries can be applied concurrently both under the Contravention Code and under the Law on Entrepreneurship and Enterprises, while there is found no difference between the facts in respect of which responsibility is provided under those two legislative acts.

In that regard, in its previous case-law the Court emphasized that the law must ensure unitary regulation and shall provide a logical-legal link between the provisions contained therein, as well as must avoid legal parallels that generate unpredictability and legal uncertainty.

At the same time, the Court found that, according to the challenged provisions, the ordinary court has no possibility to individualize the sanction, its role being reduced to a mere formality of validation of the act ascertaining the faulty situation.

The Court noted that in its case law the European Court held that if the judge is competent only in establishing the existence or non-existence of the offense or misdemeanor, but is not competent in settling the appropriateness of the fine or punishment, this judge does not exercise full jurisdiction. In this respect, the person concerned is deprived of the right to a free access to a court of full jurisdiction.

Therefore, the legislator cannot regulate a sanction in such a manner that the court has no possibility to individualize the sanction, taking into account the circumstances of the case. Thus, the limitation of the court's role deprives the guarantees of the right to a fair trial, enshrined in articles 20 of the Constitution and 6 of the European Convention, of any substance.

In view of the above, the Court held that the challenged provisions infringe Articles 1 para.(3), 20 and 23 para.(2) of the Constitution.

Judgment of the Court

Stemming from the above reasoning, the Constitutional Court partially admitted the exception of unconstitutionality raised by the lawyer Vitalie Carmanschi, case file no. 3-516/17, pending before Chişinău Court, based in Buiucani district.

Declared as unconstitutional the words "as well as which carries out the settlement in cash and via transfer through intermediaries" and the words "pecuniary sanctions in proportion of 10% of the amounts paid" in section 5, Article 10 of Law no. 845-XII of 3 January 1992 on Entrepreneurship and Enterprises.

Declared as inadmissible the exception of ​​unconstitutionality in the part referring to the review of the constitutionality of some provisions of section 4, Article 10 of Law No.845-XII of 3 January 1992 on Entrepreneurship and Enterprises.

The Judgment of the Constitutional Court is final, cannot be appealed, shall enter into force on the date of passing, and shall be published in the Official Gazette of the Republic of Moldova.

This is an English language translation of the original press-release in Romanian language.