PRENCHA v. Serbia

On September 16, 2025, the European Court of Human Rights (hereinafter: the Court) issued a judgment in the case, and on October 7 of the same yearPrenca against Serbia, number 48725/12.

The verdict was unanimousbrought More.

THE CIRCUMSTANCES CASES

The applicant (hereinafter: the applicant) lives in Novi Pazar and was professionally involved in the transportation of goods.

On May 18, 2004, the applicant was traveling in his truck from Novi Pazar to Budapest. At the Kelebija border crossing, customs control was carried out and the applicant was asked if he had anything to report. He stated that he has around 500-600 euros with him. However, after a personal search of the applicant, it was discovered that he had 49,500 euros with him, under his clothes. The amount of 2,000 euros was returned to the applicant (as the allowed amount of cash that could be transferred across the border at that time), while the remaining amount of 47,500 euros was temporarily confiscated with a certificate.

On the same day, misdemeanor proceedings were initiated against the applicant, in which the applicant stated, among other things, that he earned part of the money abroad and inherited part from his father. He also submitted a bank statement that he withdrew 50,000 euros on May 12, 2004.

On June 29, 2004, the applicant was declared responsible for a misdemeanor, a protective measure was issued to confiscate the object of the misdemeanor, that is, cash in the amount of 47,500 euros, and he was fined in the amount of 18,000 dinars. By the decision of the Chamber for the second-instance misdemeanor procedure, the applicant's appeal was accepted, the first-instance decision was canceled and the case was sent back for a new decision.

By decision of the Ministry of Finance - Foreign Exchange Inspectorate - Commission for Misdemeanors - Department in Niš numberC 04030030on November 28, 2006, the procedure was suspended in relation to the amount of 3,000 euros due to changes in the Law on Foreign Exchange Operations, according to which the allowed amount of money that can be physically transferred across the border was raised to 5,000 euros. That decision ordered that the sum of 3,000 euros be returned to the applicant. The rest of the money, in the amount of 44,500 euros, was confiscated as a misdemeanor, and the applicant was fined 18,000 dinars. By the decision of the Ministry of Finance Pžd. 118/2007 of September 26, 2007, the first-instance decision was annulled and the case was returned for a new decision.

On January 14, 2008, the Ministry of Finance - Foreign Exchange Inspectorate - Commission for Misdemeanors - Division in Niš issued a decisionC 04030030which again suspended the proceedings in relation to 3,000 euros due to changes in the Law on Foreign Exchange Operations, the rest of the money was confiscated as a misdemeanor and a fine in the amount of 18,000 dinars was imposed. The first-instance decision was modified by the decision of the Ministry of Finance Pžd. 37/08 of August 25, 2008, by suspending the proceedings in relation to the amount of 8,000 euros due to the amendments to the Law on Foreign Exchange Operations, which additionally increased the allowed amount of money for physical transfer across the border from 5,000 to 10,000 euros, and the rest of the money in the amount of 39,500 euros was confiscated as a misdemeanor. By the same decision, the applicant's fine was reduced from 18,000 to 10,000 dinars.

Against the second-instance decision, the applicant submitted a request for review of the final judgment to the then Supreme Court of Serbia, which was rejected by the decision of March 4, 2009.

The applicant filed a constitutional appeal with the Constitutional Court against the decision of the Ministry of Finance and the Supreme Court of Serbia, which was rejected.

COMPLAINTS OF THE APPLICANT AND THE PROCEDURE BEFORE THE COURT

The applicant submitted a petition to the Court on July 26, 2012.

In the petition, he complained based on Article 1 of Protocol No. 1 to the Convention that the imposition of a fine and confiscation of cash exceeding the permitted amount, which he tried to transfer across the border, were an illegal and grossly disproportionate measure.

THE DECISION THE COURT

Applying general principles to the specific case, the Court assessed that the confiscation of ready money representedmixing to the applicant's right to peaceful enjoyment of property.

The court further assessed that there was interferencein accordance with the law (Art. 62. and 64. para. 1. and 2. of the Law on Foreign Exchange Operations), but he reminded that the existence of a legal basis in domestic law sȃmo according to to myself it is not enough yes satisfy principle legality,which beside that assumes yes are will be valid provisions domestic of the law enough available,precise and predictable in own apply(quality of law). In this sense, the Court noted that the wording of Article 64 of the Law on Foreign Exchange Operations from 2006 did not leave any discretion to the local authorities regarding the possibility of imposing only a fine and that the aforementionedthe law allowed a wide field of discretion to the domestic authorities regarding the choice between the measure of complete or partial confiscation, giving special weight to the motive of the offense and leaving other mitigating circumstances to be assessed by the competent authorities. However, the Court judged that it is justified to leave open the question of the legality of the criteria for imposing a measure of complete or partial confiscation in a specific case, and instead to take them into account when considering whether the domestic authorities, when applying the disputed measure, achieved a fair balance between conflicting interests.

The court accepted the Government's argument that the requirement to declare cash at border crossings and its confiscation served a purposea legitimate goal - the fight against money laundering and other financial crimes as well as the control of cross-border foreign exchange flows, which is an international obligation according to the conventions of the Council of Europe.

Finally, evaluatingmixing proportionality, that is, whether the domestic authorities, when applying the disputed measure of confiscation of the case, established a fair balance between the applicant's property rights and requirements of general interest, and taking into account the field of free assessment left to the state, the Court reminded that the necessary balance will not be established if the property owner had to bear a "single and excessive burden".

The court emphasized that the petition refers to the issue of compliance of the measure of permanent confiscation with the Convention as a sanction for a committed offense, and not to a legal restriction regarding the carrying of cash outside the borders of the country, and noted certain difficulties in considering the specific case due to the insufficient analysis carried out by the domestic authorities and contradictory information submitted to it by the parties to the dispute.

Evaluating whether a fair balance was established between the requirements of the general interest and the applicant's right to property, the Court stated that the initial confiscation of cash (temporary confiscation) by the customs authorities was legitimate in order to investigate the circumstances of the attempt to transfer money across the border, the origin of the money, and the like. However, the Directorate for the Prevention of Money Laundering was not informed about the seized cash, nor was the applicant at any time suspected of the criminal offense of money laundering or any other criminal offense. The court concluded that, therefore, there is no evidence that the competent authorities tried to prevent any illegal activities, other than misdemeanors, by confiscating cash. In this sense, the Court reminded that, to be proportionate, the interference should correspond to the gravity of the violation and the sanction to the severity of the violation it is intended to punish, not to the severity of any alleged violation that is not actually established or even argued, such as the crime of money laundering.

The court further noted that the procedural response to the applicant's difficulties in proving the origin of the money was inadequate and marked by the absence of procedural guarantees that would allow the applicant to present his case to the competent authorities and ensure a fair balance between public and personal interest.

The court is of the opinion that no convincing arguments were presented regarding the necessity of confiscation of cash in order to achieve the desired effect in the circumstances in which the applicant found himself, i.e. that the competent authorities did not assess the measure of confiscation of the object of the offense (cash) against the gravity of the offense and the imposed fine.

The Court therefore concluded that the imprecise legal framework in its essential elements regarding the freedom granted with regard to the imposition of a measure of total or partial confiscation, together with the insufficient review carried out by the domestic authorities and the lack of procedural guarantees inherent in Article 1 of Protocol No. 1 to the Convention, could not ensure the achievement of the necessary fair balance between the requirements of the general interest and the protection of the applicant's right to the peaceful enjoyment of his property.

Consequently, the Court established a violation of Article 1 of Protocol No. 1 to the Convention.

FAIRLY SATISFACTION (Article 41 of the Convention)

The court obliged the Republic of Serbia to pay the applicant an amount of39.500 euros and the amount of 1,930 euros in the name of reimbursement of costs, while he assessed that determination of violation of sȃmo according to to myself represents enough fairly satisfaction for intangible damage which one is suffered the applicant.