Confiscation of owners only
Pepeliaev Group advises that on 25 April 2011 the Russian Constitution Court issued Resolution No. 6-P in case regarding the analysis for compliance with the Constitution of part 1 article 3.7 (confiscation of the instrument and target of the administrative offence) and part 2 article 8.28 (illegal cutting, damage to forest and unauthorised digging out of trees, bushes and lianas in forests) of the Russian Code on Administrative Offences in connection with a claim fr om OOO StroyKomplekt.
BackgroundOOO StroyKomplekt transferred to OOO Tellura under a lease agreement a multifunction logging machine, using which OOO Tellura’s employees, G.A. Dvoryashin and D.V. Strogonov unlawfully cut down some trees and, consequently, were found guilty of committing the administrative offence envisaged in part 2, article 8.28 of the Code of Administrative Offences. The offenders were punished for this administrative offence by being fined RUB 3,500 and having the instrument of the administrative offence – i.e. the multifunction logging machine owned by OOO StroyKomplekt – confiscated.
In its supervisory appeal, G.A. Dvoryashin pointed out that he did not own the logging machine which was to be confiscated; the machine had been given to him by the employer who leased it. The court dismissed the appeal pointing out that, pursuant to article 3.7 of the Code of Administrative Offences, the instrument of offence should be confiscated irrespective of whether the person who committed this administrative offence owned it or used it based on any other lawful grounds. The owner of the confiscated property, OOO StroyKomplekt, was not involved in litigation.
Position of the Claimant – owner of the confiscated property – stipulated in the claim filed with the Russian Constitutional Court
OOO StroyKomplekt believed that part 1 article 3.7 and part 2 article 8.28 of the Code of Administrative Offences violated its right of ownership guaranteed by the Russian Constitution. These articles provide for the confiscation of the instrument used to commit an administrative offence without holding the owner of this property liable for this administrative offence and involving the owner in administrative proceedings. By confiscating the logging machine, the court punished the owner of the property, rather than the persons held liable for the administrative offence.
Matter at issue
The matters considered by the Constitutional Court were the provisions of part 2 article 8.28 of the Code of Administrative Offenses, which allow, in connection with part 1 article 3.7 of Code of Administrative Offences, the instrument used to commit an administrative offence to be confiscated when owned by a person other than the person held liable for this administrative offence and when the other person is not involved in these administrative proceedings.
Position of the Constitutional Court
Apart from the main penalty of an administrative fine, the Code of Administrative Offences provides for additional mandatory penalty of confiscation of the instrument used to commit the administrative offence (unauthorised wood cutting). However, the law does not provide that the owner of the property that was used as the instrument of the offence must be a party to the litigation. The court, therefore, does not find the owner guilty and the owner is unable to protect its rights through judicial proceedings. Consequently, if the owner is not held liable or found guilty, it is the owner (not the offender) who is punished in the form of confiscation of the owner’s property, in this case the multifunction logging machine.
Therefore, the Constitutional Court ruled that part 2 article 8.28 of the Code of Administrative Offences does not comply with parts 1 and 3 of article 35, part 1 of article 46, part 2of article 54 and part 3 of article 55 of the Constitution in terms of these provisions allowing in connection with part 1 of article 3.7 of the Code of Administrative Offences for an administrative penalty in the form of confiscation of the administrative offence instrument owned by a person that is not held administratively liable for this administrative offence and not held guilty of committing this offence based on judicial proceedings.
However, the legal position of the Constitutional Court is applied taking into account the following:
1. The owner is held liable for an administrative offence punished by confiscation if it is established that the owner has transferred the instrument of the administrative offence to other persons to commit administrative offences;
2. The Constitutional Court also reinstated its position expressed earlier in Resolution No. 8-P dated 14 May 1999 to the effect that property may be confiscated if it was used as the instrument, tool or direct target of a customs offence, irrespective of whether the relevant goods and vehicles are owned by the person who committed the offence and also irrespective of whether this person has been identified or not.
The Resolution will come into force immediately after it is published, and it will be applied directly without requiring any approval of other authorities and officials.
According to article 6 of the Federal Constitutional Law On the Constitutional Court of the Russian Federation, resolutions of the Constitutional Courts are universal and binding on all authorities, officials, companies and individuals in the Russian Federation.
The Resolution of the Constitutional Court will no longer allow for the instruments or targets of administrative offences to be confiscated (except for cases wh ere customs rules are violated) based on administrative proceedings, when a person other than the owner of the confiscated property is held liable.
Pepeliaev Group’s lawyers have extensive experience of representing their clients in administrative cases and are ready to provide full legal support in the relevant proceedings.
For further details, please contact:
in Moscow – Elena Ovcharova, Head of the Administrative Defence of Business Group, at (495) 967-00-07 or by e-mail; Nataly Travkina, Lead Associate, at (495) 967-00-07 or by e-mail; Elena Lazareva, Lead Associate, at (495) 967-00-07 or by e-mail;
in St Petersburg - Sergey Spasennov, Partner, Head of St. Petersburg office, at (812) 333-07-17 or by e-mail