The Constitutional Court found No 177 / 2015 Coll.
The Constitutional Court found of 16 June 2015 sp. zn.
Valid
The Constitutional Tribunal found
Text versions:
23.07.2015
177
FIND
The Constitutional Court
On behalf of the Republic
The Constitutional Court decided under sp. zn. Pl. ÚS 12 / 14 on 16 June 2015 in plenary composed of the President of the Court of Paul Rychetský and the Judges Louis David, Jan Filip, Vlasta Formánková, Jaroslav Fenyk, Vladimir Krorka, Tomáš Lichovník, Jan Musil, Vladimir Sládeček, Radovan Sukánek, Kateřina Šimáková (Judge of the Rapporteur), Milady Tomková, David Uhlíř and Jiří Zemánek on the proposal of the Supreme Administrative Court of the Constitutional Tribunal under Article 95 (2 of the Constitution of the Czech Parliament of the Czech Republic and the Senate as party to the proceedings, that the provisions of § 14e 4 of Law 218 / 2000 Coll.
as follows:
Paragraph 14e (4) of Act No. 218 / 2000 Coll., on budgetary rules and on the amendment of certain related laws (budgetary rules), as effective by 19 February 2015, in words "and its judicial review is excluded" was contrary to Article 1 (1) of the Constitution and Article 36 (2) of the Charter of Fundamental Rights and Freedoms.
Reasons
Original proposal
1. On 16 June 2014, the Constitutional Court received a request from the Supreme Administrative Court ("the appellant ') to abolish the provisions of Paragraph 14e (4) of Act No. 218 / 2000 Coll., on the budgetary rules and on the amendment of certain related laws (budgetary rules), in the then wording, in words" and its judicial review is excluded'.
2. The appellant - invoking Article 95 (2) of the Constitution of the Czech Republic (hereinafter referred to as "the Constitution") and the provisions of Article 64 (3) of Law No 182 / 1993 Coll. on the Constitutional Court, as amended, (hereinafter referred to as "the Law on the Constitutional Court"), has made it contrary to the constitutional order in relation to its decision-making activities in the case under Spanish law 2 As 12 / 2014.
Proceedings before administrative authorities and administrative courts
3. By application lodged at the Municipal Court in Prague, the applicant, the University of Báňská - Technical University of Ostrava, requested the annulment of the decision of the subsidy provider of the Ministry of Education, Youth and Sports of 30 September 2013 No. MSMT 38871 / 2013 and of 7 November 2013 No. MSMT-38871 / 2013-2, by which she was informed as beneficiary of the subsidy of the suspension of payments for the IT4 Centre of Excellence project Innovations amounting to CZK 23436 947,44, because according to his conviction, the rules for the award of public contracts co-financed by the budget of the European Union were violated by the negotiations described in the statement of reasons.
4. The Municipal Court in Prague rejected the action by order of 2 January 2014 No 9 A 200 / 2013-42. In its resolution, the Municipal Court referred to § 14e (4) of Act No. 218 / 2000 Coll., on budgetary rules and amending certain related laws (budgetary rules), as amended, (hereinafter referred to as "the Law on Budgetary Rules'), containing the explicit exclusion of the decision to suspend the subsidy from judicial review. It also referred to the reason for the exclusion from judicial review under the provisions of § 68 (e) of Act No. 150 / 2002 Coll., the administrative rule of law according to which the action is also inadmissible, provided that this is provided for by a special law, which is in accordance with § 14e (4) of the Budgetary Rules Act. Moreover, according to the municipal court, this exclusion is" justified by the temporary and provisional nature of the measure '.
5. The applicant, as a complainant, lodged a complaint against that order, alleging that even in the case of a formal impossibility of judicial review of measures issued pursuant to Article 14e (1) of the Law on Budgetary Rules, it is necessary to open the judicial review by means of a constitutional interpretation of the provisions of Article 14e (4) of the Law on Budgetary Rules in order to assess the alleged infringement of the fundamental principles of administrative activity. The applicant referred to Article 36 (2) of the Charter of Fundamental Rights and Freedoms (hereinafter referred to as "the Charter '), according to which the review of decisions concerning fundamental rights and freedoms must not be excluded from the jurisdiction of the court; The lack of procedural arrangements for the non-payment of the subsidy (or suspension of payment) to the extent to which it was granted, due to the lustful or conjecture, strengthens the importance of these principles. The applicant pointed out that it had intervened in its fundamental rights, since the impossibility of having the subsidies at the level granted had forced it to replace the missing funds from its own resources, while, in the event of uncertainty about the further procedure, the intervention could in fact be final. Moreover, the intervention in its rights also sees that it is impossible to demonstrate in due process that it has actually fulfilled its obligations in implementing the project for which the subsidy was granted.
6. The Supreme Administrative Court, in its proceedings on this complaint, has held that the provisions of Paragraph 14e (4) of the Law on budgetary rules in the part of which it provides that the judicial review excludes the measures referred to in paragraphs 1 to 3 which must be applied to it is contrary to the constitutional order of the Czech Republic, since they cannot be interpreted without the complainant being shortened in its right to judicial protection under Article 36 (2) of the Charter.
Recital of the proposal
7. At the outset, the Supreme Administrative Court recalled that the Municipal Court adopted an act the complainant sought to examine as a decision; However, it cannot be excluded from the nature of the contested action that it may be another act having the character of intervention (cf. Order of the extended Chamber of Supreme Administrative Court of 16.11.2010 No 7 Aps 3 / 2008-98); However, the exclusion provided for in Section 14e (4) of the Budget Rules Act affects it regardless of how it is qualified by the administrative court.
8. The amendments made by Act No. 465 / 2011 Coll., amending Act No. 218 / 2000 Coll., on budgetary rules and amending certain related laws (budgetary rules), as amended, and certain other laws, were incorporated with effect from 30 December 2011 into the Act on Budgetary Rules, the possibility that the grant provider would not pay part of the subsidy to its beneficiary if it was considered that there was a breach of the public procurement rules co-financed by the budget of the European Union (Section 14e (1) of the Budgetary Rules), and this measure was expressly excluded from judicial review.
9. A breach of the obligation laid down by the law, decision or agreement to grant a subsidy which is directly related to the purpose for which the subsidy was granted, which took place prior to the receipt of the funds and which takes place at the time of their acceptance into the beneficiary's account, shall be classified as a breach of budgetary discipline [Paragraph 44 (1) (j) of the Budgetary Rules Act] and shall be the responsibility of the person in breach of the budgetary discipline to make a contribution to the State budget by the competent financial authority [Paragraph 44a (3) (a) of the Budgetary Rules Act]; in the case of unauthorised use of subsidy funds containing funds from the European Union, the amount of the levy shall be determined by the Financial Office [Paragraph 44a (4) (b) of the Budgetary Rules Act]. The legislation therefore provides for control powers (among other bodies) for the grant provider, but the consequences of the finding of irregularities and their qualifications in the form of an obligation to make a payment for breaches of budgetary discipline are decided by the competent tax authority in the tax procedure and its decisions are subject to review by administrative courts.
10. In these circumstances, according to the appellant, Paragraph 14e is included in the Budget Rules Act in a non-systematic manner, as it allows the grant provider to stop payment before it can be objectively established that the rules laid down for the subsidy (or even without it) are infringed. The reasons for such a strong authorisation may seem legitimate if its purpose is to prevent the misuse of public funds in a timely manner, since it is clear that the mere finding of a breach of the rules after the funds have already been used illegally could only be of an academic nature. Moreover, the amendment of the Budget Rules Act (Act No. 465 / 2011 Coll.) was intended to remove the interpretative difficulties of the practice as to whether even in the event of a mere suspicion of a breach of the recipient's obligation to continue to pay the subsidy or to stop the reimbursement; A solution was chosen that the funds withheld should correspond to the amount to which the levy would have been imposed for the infringement, which implies that the subsidy provider cannot stop the reimbursement altogether.
11. However, the assessment of the gravity of such a "suspicion" is exclusively for the grant provider and the presumption of infringement does not necessarily have to be preceded by a control or other legally foreseen and regulated procedure. Moreover, the effectiveness of a measure holding outstanding funds, which is intended only to be provisional and temporary, does not limit the law to any period of time, but leaves it, in addition to assessing the seriousness of the suspicion, to a determination whereby the beneficiary and the Financial Office will inform the beneficiary of such action, or when it will continue to reimburse the remainder of the subsidy, entirely on the intention and discretion of the provider or on its segregation. The subsidy provider is therefore not bound by any time limit or procedural rules. In the absence of a review of such a measure by the court as a result of an explicit exclusion, "there is an opening up of scope for the approval of the subsidy provider and a steep rise in the risk of corruption '.
12. According to the appellant, the measure under Section 14e (1) of the Budget Rules Act interferes with the recipient's rights by violating the principle of legitimate expectations. In fact, the beneficiary reasonably assumes that a full amount will be paid to him in the meaning of the decision granting the subsidy (unless it is established that he has infringed his obligations, as a result of which it would be appropriate to withdraw or withdraw part of the subsidy). This is because, at the time of the final decision to grant the grant, the beneficiary is entitled to receive the grant in accordance with its intended purpose, and it is necessary to take appropriate steps to ensure that the grant can be properly drawn up and used (preparation of project documentation, conclusion of contracts for the implementation of the grant, etc.). The cessation of payment of the subsidy is, in this situation, an immediate interference with the ownership of the beneficiary under Article 11 of the Charter and may also infringe his right to engage in other economic activities under Article 26 of the Charter. In that context, the appellant pointed out that, in addition to the immediate intervention of the beneficiary of the grant, there is a chain of intervention of others, such as the cessation of construction works, the preservation of the built-up structure, the threat of contractual penalties.
13. The appellant also pointed out that the unconstitutional nature of the contested provision does not consider that the legislator allows the payment of the subsidy to be suspended but, in the absence of criteria for this procedure, which results in the possibility of indiscretions by the provider and the lack of legal certainty on the part of the beneficiary. It also opens up a parallel to the modification of the so-called reinsurance institutes, to which the Constitutional Court has expressed its views, e.g. in the sp. zn. I. ÚS 2485 / 13 of 2.12.2013 (N 206 / 71 CollNU 429), in which it defined the basic criteria for assessing the constitutional conformity of the intervention in property rights and the need to review the proportionality of the hedging instrument used. It is clear that the contested provision makes it absolutely impossible to assess such proportionality or to establish any indiscretions by excluding judicial review.
Observations of the parties
14. The Chamber of Deputies of the Parliament of the Czech Republic ("the Chamber of Deputies"), in its observations on the proposal of 31 July 2014, signed by the President of the Chamber of Deputies, Jan Hamakk, stated that the Government's draft Act No. 465 / 2011 Coll., amending Act No. 218 / 2000 Coll., on the Budget Rules and on the amendment of certain related laws (budgetary rules), as amended, and certain other laws, was discussed as Parliament's Press No. 287 (circulated to Members on 21 March 2011) in the first reading of the 27th April 2011 at the 16th meeting of the Committee of Budgets to the Committee of Buddies and to the Control Committee which the draft Act was discussed on 27 May 2011 and 8 June 2011 respectively. The second reading went through both the general and detailed debate on 20 September 2011 at the 23rd meeting and the amendments tabled were processed as House Press No. 287 / 3 and circulated on 21 September 2011. The third reading took place on 27 September 2011 and the Chamber of Deputies approved the bill (143 pro and 4 anti). The Senate of the Parliament of the Czech Republic (hereinafter referred to as "the Senate") discussed the bill under press number 218 at the 13th meeting on 27 October 2011 and returned it to the Chamber of Deputies with Amendment 400. The Senate resolution was delivered to the Chamber of Deputies and circulated to Members on 1 November 2011 as House Press No. 287 / 5, the bill returned by the Senate was voted on on 6 December 2011 at the 32nd session and adopted by the Chamber of Deputies as approved by the Senate under House Press No. 287 / 5. The President of the Republic signed the Act on 19 December 2011 and on 30 December 2011 the Act was published in the Collection of Laws under No. 465 / 2011 Coll. The President of the Chamber of Deputies summed up that the law was adopted after a proper legislative process and with the conviction that the provisions of Paragraph 14e (4) of the Act on budgetary rules in part "and its judicial review is excluded 'is in accordance with the Constitution and the legal order of the Czech Republic.
15. The Senate submitted its comments on the proposal by letter dated 30 July 2014, signed by President Milan Štěm. The Organising Committee appointed Senate Press No. 218 to discuss the Committee on Economic, Agriculture and Transport, which recommended the plenary to approve the bill in the version referred to by the Chamber of Deputies. The draft law was discussed at its 13th meeting on 27 October 2011 and was not approved by the Chamber of Deputies as referred to it; In a detailed debate, it proposed adding provisions relating to a different part of the draft law than amendments to the budgetary rules, and a number of legislative amendments were tabled to remedy some of the shortcomings of the press referred to. The bill was returned to the Chamber of Deputies with approved amendments.
16. In its observations on the application of 28 July 2014, signed by President Bohuslav Sobotka, the Government informed the Constitutional Court that it would not exercise its right to intervene under Paragraph 69 (2) of the Constitutional Court Act.
17. Similarly, the Ombudsman, Anna Shabat, made a statement by letter dated 11 July 2014; Although it did not intervene, it stated that it was in agreement with the proposal of the Supreme Administrative Court.
Text of the contested provision
18. Paragraph 14e of the Act on Budgetary Rules (the contested part of the provision highlighted) was worded as follows at the time of the application by the Supreme Administrative Court:
(1) The provider does not have to pay part of the subsidy if he considers that the procurement rules cofinanced by the budget of the European Union have been infringed up to the amount set out in the decision granting the subsidy as the maximum amount of the payment for breach of budgetary discipline. It shall take into account the seriousness of the infringement and its impact on the objective of the subsidy.
(2) In the event that the provider makes the payment of the subsidy under paragraph 1, it shall inform the beneficiary and the competent financial authority in writing, including its scope and justification.
(3) If the provider of the measure is implemented in accordance with paragraphs 1 and 2, he may continue to pay the remainder of the subsidy.
(4) The measures referred to in paragraphs 1 to 3 shall not be subject to general administrative rules and its judicial review shall be excluded.
Assessment of the jurisdiction of the Constitutional Court to discuss the application and the applicant's active legitimacy
19. The Constitutional Court first focused its attention on whether the procedural conditions for the substantive examination of the application, namely the question of whether the Supreme Administrative Court was actively legitimised.
20. In accordance with Article 95 (2) of the Constitution, if the court concludes that the law to be applied in the resolution of the case is contrary to the constitutional order, it shall bring the matter before the Constitutional Court for consideration; In accordance with Article 64 (3) of the Law on the Constitutional Court, Article 64 (3) of the Law provides that an application for annulment of the law or its individual provisions is also entitled to be lodged by the Court in the context of its decision-making activities.
21. The General Court is thus given the possibility not to apply the law or its individual provisions in a specific procedure which it considers to be unconstitutional and which make it impossible to achieve a constitutional consensus result. This condition was clearly met at the time of the proposal. Only the annulment of the contested provision could open up the scope for a substantive hearing of the complainant's application to the Supreme Administrative Court, thereby eliminating the constitutional deficit which has affected the current action against the administrative decision in his view. The applicant therefore had an active legitimacy to the submitted proposal.
Amendment of the proposal
22. On 5. 2. 2015, Act No. 25 / 2015 Coll., amending Act No. 218 / 2000 Coll., on budgetary rules and amending certain related laws (budgetary rules), as amended. It took on 15 days after its publication, i.e. 20 February 2015.
23. Paragraph 14e of the Budget Rules Act continues to read as follows:
(1) The provider does not have to pay the subsidy or part thereof, if it considers that its recipient has, in direct connection with it, infringed the obligations laid down by law or failed to comply with the purpose of the subsidy or the conditions under which the subsidy was granted; If a lower contribution is provided for in respect of breaches of budgetary discipline pursuant to Article 14 (6), the amount of the part of the subsidy outstanding must be set within the limits of the amounts calculated in accordance with Article 14 (6). Within the percentage range, the provider shall take into account the seriousness of the infringement and its impact on compliance with the purpose of the subsidy. No payment of the subsidy or part thereof may be made on non-compliance with the obligation under Paragraph 14 (4) (k).
(2) The provider shall inform the beneficiary in an appropriate manner of the measure referred to in paragraph 1 without undue delay. Within 15 days of receiving this information, the beneficiary may object to the measure. Opposition is decided by the person who heads the provider.
(3) The decision on objections shall decide whether the provider's measure was fully justified, partially justified or not justified. There is no appeal against the decision on objections.
(4) If the measure of the provider has been considered fully justified in the Opposition Decision, the supplier or part of it will not pay the beneficiary. If it has been considered to be partially justified, the provider shall pay the beneficiary a part of the subsidy which he has not unduly paid. If it has been assessed as unjustified, the provider shall pay the beneficiary the outstanding subsidy or part thereof. The provider shall pay the beneficiary, or part thereof, which he has not unlawfully paid him, within five working days of the date of the legal authority of the decision on objections.
(5) The provider shall inform the Financial Office accordingly of the measure referred to in paragraph 1 and of the decision on objections referred to in paragraph 3 without undue delay.
(6) If the provider of the measure referred to in paragraph 1 is implemented, it may continue to pay the remainder of the subsidy.
24. The text of Paragraph 14e of the Law on budgetary rules has therefore been replaced by a new text, for which it is determining that it no longer contains the original draft contested part of the then paragraph 4.
25. The Constitutional Court has repeatedly made it clear in its decision-making practice that, in such cases, it is no longer possible to comply with the application for annulment of the law or its provisions, but that it is generally possible to decide whether or not the contested provision was contrary to the constitutional order at the time of its effectiveness.
26. Following the call by the Constitutional Court, the appellant amended the original proposal by submitting on 11 March 2015, in such a way that instead of the application for annulment of the provision (part) concerned, "the Constitutional Court stated that the provisions of Paragraph 14e (4) of Act No. 218 / 2000 Coll., on the budgetary rules and on the amendment of certain related laws (budgetary rules), as amended by Act No. 465 / 2011 Coll., i.e. as effective from 30 December 2011 to 19 February 2015, are in part worded and its judicial review 'is excluded in breach of Article 36 (2) of the Charter of Fundamental Rights and Freedoms'.
27. The amendment of the proposal was justified by the fact that, when deciding on a complaint, the provisions of Paragraph 14e (4) of the Law on budgetary rules in the original version must be applied, and therefore, for its review, it remains determinative whether the exclusion of judicial review of the measure under Article 14e (1) of the Law on budgetary rules, to which the municipal court has resorted, is constitutional or not.
28. The resolution of the question before the Constitutional Court by the Supreme Administrative Court is therefore necessary in the case from which his application was made, since it must be applied by the provisions of Paragraph 14e (4) of the Law on budgetary rules in its original version (from 30 December 2011 to 19 February 2015) and his decision on the appeal against the judgment of the Municipal Court is directly dependent on the Constitutional Court from this assessment.
29. Therefore, the conclusion that the conditions of the applicant's active legitimacy, as set out in point 21 above, are met, will also apply in relation to the amended proposal.
30. In the light of the previous case-law of the Constitutional Court, for example, the findings of sp. zn. Pl. Pl. Pl.
Abandonment of oral proceedings
31. The Constitutional Court did not expect further clarification of the case from the oral hearing, therefore it waived the first sentence of Paragraph 44 of the Law on the Constitutional Court.
Constitutional conformity of the legislative process
32. The Constitutional Court, as required by the provisions of Paragraph 68 (2) of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended by Act No. 48 / 2002 Coll., further assessed whether the contested provision was adopted within the limits of the Constitution laid down by competence and by the constitutional procedure. In view of the observations made by the two chambers of Parliament, the available descriptions of the legislative procedure for the adoption of the relevant law, as well as the fact that the legislative procedure is not even questioned by the appellant, it can only be concluded that the condition of the constitutional conformity of the legislative process has been met.
Meritorial review
Principles of the rule of law
33. The Constitutional Court, when examining the application for annulment or the finding of non-constitutionality of the judicial lockout for a measure consisting of suspension of the subsidy, cannot disregard the overall context of the legislation governing suspension of the subsidy. The legislative text cited in point 18 of this finding allowed the subsidy provider not to pay this partially if it considered that the rules had been infringed, while the determination of the extent of the suspension was left to its discretion. The only legal restriction was that the provider should take into account the seriousness of the infringement and its impact on the objective of the subsidy. This process of the provider was neither subject to the provision in question, nor regulated by the general administrative rules, nor by judicial review. The non-controlled and realistically unlimited reasoning of the provider was sufficient to suspend the payment of the already granted subsidy for an unlimited period of time, in a situation where it merely assumed that the rules had been infringed.
34. The suspension of the payment of part of the subsidy is a decision that deeply affects the legal sphere of the beneficiary. Such a measure may have a serious impact on it, as it may undermine the whole of its planned and subsidies to the aided project; where appropriate, in order to be responsible for the failure to fulfil the obligation (typically to pay the price of the ordered item or service) for which he has undertaken, he assumes that he will obtain the funds for its reimbursement from a subsidy, without which he may not have them at all. This suspension comes only after the State has already decided to grant the subsidy and its conditions. The beneficiary relied on this decision to grant the subsidy and expected it to be paid if it complied with the conditions laid down. The subsidies are often granted on condition of co-financing by the beneficiary, so the subsidy position can not only thwart the beneficiary's intention but also the investment from its own resources. The Act did not lay down any more specific criteria for the suspension of the payment of the subsidy or the period until which a subsequent penalty or the renewal of the use of the subsidy had to be decided. In that context, the appellant points out that the exclusion of judicial review makes it impossible to protect the legitimate expectations of the recipient from any arbitrary provider.
35. Thus, the Constitutional Court first accepted the assessment of the contested judicial exclusions from the point of view of protection against arbitrage, namely from the point of view of maintaining the maximum material rule of law. The Czech Republic is defined as a democratic rule of law in Article 1 (1) of the Constitution. The concept of the rule of law is laid down in the principle of the state's commitment by law. The Constitutional Court then applies the principles of the rule of law as one of the important standards of the constitutionality of laws.
36. In the case-law of the Constitutional Court, the importance of the constitutional principle of the rule of law and the observance of its various aspects [cf. the finding of 28.6.2005 sp. zn. In a democratic rule of law, the right must have the appropriate quality formal [cf. In this context, the theory of law talks about so-called formal values of law, which do not determine the content of legislation, but have the right to ensure the very existence and acceptance and applicability: these values include values of order, predictability, freedom from arbitrariness, legal equality or legal certainty (Summers, R. S. Essays in Legal Theory. Dordrecht - Boston - London: Kluwer Publishing, 2000, p. 30). Any legislation must express respect for the general principles of law (principles), such as trust in law, legal certainty and the predictability of legal acts that structure or are deductible from the rule of law of a democratic rule of law.
37. The democratic rule of law is characterised by the principle of legal certainty, inter alia, that legal rules will be clear and accurate and ensure that legal relations and their consequences will remain predictable for the addressees of the rules. The commitments and promises taken by the State towards individuals should be respected (principle of legitimate expectations). The principle of legal certainty must then be combined with the prohibition of arbitrariness so that the discretion of the public authorities is limited by procedures to prevent the abuse of this discretion, with the best prevention and subsequent protection against arbitrariness being access to justice, that is to say to a court which will be subject to judicial control (cf. European Commission for Democracy report through law, the Venice Commission, on the rule of law, adopted at its 86th session in March 2011, No 512 / 2009, available at www.venice.coe.int).
38. Although the appellant also submitted only an exemption from judicial review to the Constitutional Court for consideration and could not have done otherwise, since only that part of the provision cited in Section 14e of the Law on Budgetary Rules prevented the General Court from taking judicial control of the administrative action of the contested suspension of the subsidy, the Constitutional Court cannot proceed to the examination of the proposal without taking into account all the legal context. The Czech and European legislature (see also paragraphs 58 et seq., also cited in the judgment of the Court of Justice of the European Union of 21.9.1989 in Case C-68 / 88 of the Commission of the European Communities v Hellenic Republic, according to which it is a breach of obligations arising from European law, unless criminal or disciplinary proceedings have been initiated against persons who have participated in the implementation and concealment of acts which allow the payment of agricultural benefits under EEC law to be avoided) imposes liability for the protection against potential misappropriation of the subsidy, without, however, being brought by law or by the court to balance this public interest with responsibility for the protection of the rights of the recipient.
39. The conditions for drawing up the grant are laid down either in the decision to grant the grant or in the grant contract, more precisely in the documents referred to in these legal titles. It is regularly a number of manuals, conditions and methodologies that the beneficiaries must comply with when drawing it, checks on their compliance are carried out on the basis of Act No. 320 / 2001 Coll., on Financial Control in Public Administration and on the amendment of certain laws (Financial Control Act), as amended ("Financial Control Act '). Section 13a of the Financial Control Act lays down specific procedural rules for auditing in accordance with directly applicable European Union rules. The audit report shall include the identification of identified deficiencies. Such deficiencies may be the nature of the so-called irregularities which may have an impact on the final amount of funding provided under European Union law (Council Regulation No 1083 / 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund). If, on the basis of an audit carried out, the subsidy provider indicates that there has been a breach of the procurement rules in the performance of the activities financed by the relevant subsidy, it may suspend the payment of the subsidy (or may not pay part of the subsidy) under Section 14e of the Budget Rules and inform the competent financial authority accordingly of its findings. In accordance with Section 85 et seq. of Act No. 280 / 2009 Coll., the Tax Code, as amended, will initiate the tax control of the beneficiary of the subsidy, which results in either a finding of a breach of the budgetary rules and a possible subsequent assessment procedure and the imposition of a penalty, or a tax control of the tax office of defects and deficiencies in connection with a public contract, or a breach of the budget rules, and then no further action is taken by the tax office. The tax office may, only as a result of findings under tax control, take penalty measures to issue a payment notice requiring beneficiaries to make payment for breaches of budgetary discipline if they find errors. If he does not find out the error, he does not have the legal authority to take any further action, i.e. he does not even make any decisions. Underconstitutional law does not provide for a situation where the tax office concludes that there is no breach of budgetary discipline and the subsidy provider does not agree with this view (a criticism of the legislation which does not provide sufficient procedural frameworks for the described situations, e.g. in Article Moravec, O. Reducing the subsidy in the case-law of the Supreme Administrative Court - semi-clear?, available under No 95155 na www.efron.cz).
40. The suspension of the subsidy alone, where the competent financial authority or even the provider itself subsequently concludes that the beneficiary has not infringed any of its obligations, is therefore no longer the subject of judicial review by the State, which would establish the illegality of the suspension of the drawing of the subsidy. Nor does the sub-constitutional legislation in any way address situations where the tax office does not issue a payment notice requiring the beneficiary to make a payment for breach of budgetary discipline, and the subsidy provider does not, however, pay the recipient the funds withheld. Moreover, there are no explicit deadlines for the competent authorities to decide. It is possible that, as a general rule, it will be carried out in such a way that both the provider, the managing authority and the competent financial authority will have the standard conclusions of the audit carried out under the quoted provisions of the Financial Control Act and, therefore, the assessment of the contribution for the breach of budgetary discipline by the Financial Office will be made. However, if this decision to make a payment for a breach of budgetary discipline, which is certainly judicial, is challenged by the beneficiary, the court will in no way assess the justification for suspending the drawing of the subsidy under the contested provisions of the Budget Rules Act, but will only assess the legality of the contested payment notice. Thus, the sub-constitutional law does not open any possibility whereby, where appropriate, the ground plan for the subsequent judicial check was established whether the suspension of the drawing of the subsidy had taken place in a legal way and was not arbitrary.
41. Therefore, the exclusion of judicial control over the suspension of the subsidy under this framework of the sub-constitutional law results in any arbitral, arbitrary or even bullying procedure of the subsidy provider not being referred to or sanctioned in any way, as this procedure does not have to be the subject of judicial review. However, this is not possible in a democratic rule of law, which has a duty to protect the legitimate expectations of individuals, their legal certainty and their fundamental rights from the arbitrariness of state institutions' procedures.
42. The contested provision, which provides for an exclusion from judicial review in the context described above, is, in the first place, contradictory to Article 1 (1) of the Constitution, which guarantees the observance of the fundamental principles of the material rule of law, namely the protection of legal certainty, the prohibition of arbitrariness and access to justice.
Right to review decisions of a public authority relating to fundamental rights and freedoms
43. Another key measure of the evaluation of the proposal is the provision of Article 36 (2) of the Charter, according to which a judicial review of a decision of a public authority may be excluded (Article 36 (2) of the Charter, first sentence in fine), but the jurisdiction of the court must not preclude the review of decisions relating to fundamental rights and freedoms under the Charter (Article 36 (2) of the Charter, second sentence).
44. The Constitutional Court has repeatedly made it clear in its previous case-law that everyone has: The Charter the right to seek the protection of its rights in a court or other body, with the conditions and rules governing the exercise of that right laid down by law, such a law, issued under constitutional authority, cannot deny that right - these conditions and rules - on the other hand. The cited Article 36 (2) of the Charter is a logical consequence of this. a different relevance of fundamental rights and freedoms is reflected, which is due to their different nature to a logically higher protection than those established only by law [Found sp. zn.
45. Thus, the right to judicial review is a public subjective right guaranteed at constitutional level by the legal exclusion of an unaffected decision of a public authority. The Constitutional Court has therefore also taken the view that the procedure of the subsidy provider under Section 14e (1) of the Budget Rules Act affects one of the fundamental rights and freedoms of its beneficiary.
46. As already mentioned above, in accordance with the procedure laid down in Section 14e of the Budget Rules Act, intervention in the legitimate expectations of the beneficiary may occur. In fact, if the beneficiary complies with all the conditions laid down in the decision granting the subsidy, the legislation and any other standards for drawing on and using the subsidy, then it has a legitimate expectation that the entire grant will be granted to him. In the event that, by reason of a mere unfounded presumption on the part of the provider, the payment of part of the subsidy is suspended, such a procedure is an intervention into the legitimate expectation of the beneficiary that the entire subsidy will be paid to it and can be used for the intended purpose. The breach of this legitimate expectation is not only an intervention in its legal certainty, as described above, but also an intervention in its right to the protection of property, as provided for in Article 11 of the Charter.
47. In the case-law of the Constitutional Court, legitimate expectations are protected as one of the principles arising from the rule of law (see above in paragraphs 37 et seq.), the principle of certainty, inconsistencies and predictability of the rules [cf. sp. zn. I. ÚS 287 / 04 of 22.11.2004 (N 174 / 35 of the SbNU 331), or from the principles of good administration, but the Constitutional Court also finds in a number of its decisions the protection of legitimate expectations in connection with the protection of property law, in the wider sense of the [cf.
48. In its decision sp. zn. Pl. ÚS 53 / 10 of 19.4.2011 (N 75 / 61 SbNU 137; 119 / 2011 Coll.), the Constitutional Court emphasised the essential importance of protecting legitimate expectations, in which it concluded that the additional reduction in the amount of the entitlement to State aid to a specified extent in order to reduce the expenditure of the state budget would not be sufficient in view of the legitimate expectations of the participants in the building savings. After fulfilling the conditions for entitlement to State aid for a given calendar year, the participant could legitimately expect that the State would not subsequently change them or change the entitlement itself. This is an expectation which is due to the protection of both the principle of legal certainty and the protection of trust in the law and, respectively, the protection of acquired rights under Article 1 (1) of the Constitution, and the property nature of the claim under Article 11 (1) of the Charter and Article 1 of the Additional Protocol to the European Convention for the Protection of Human Rights and Fundamental Freedoms ("the Convention '). This provision does not apply only to acquired (existing) assets, but also to the legitimate expectation of acquiring such assets.
49. Even according to the case law of the European Court of Human Rights, the protection of legitimate expectations is also an integral part of the protection of property rights, namely the protection of a claim which at least has legitimate expectations (ésperance légitime / legitimate expedition). The central rule in assessing the existence of such legitimate expectations is to take into account the specific and individual circumstances of the case which, in summary, should have established legitimate expectations as a property interest protected by Article 1 of the Additional Protocol to the Convention (judgment of the Grand Chamber of the European Court of Human Rights in Anheuser-Busch Inc. v Portugal, 11.1.2007, No 73049 / 01, paragraph 63-65, or the judgment of the European Court of Human Rights in Glaser v Czech Republic, 14.2.2008, No 55179 / 00, paragraph 50- 52).
50. The appellant may have pointed out the parallel of the suspension of the drawing-up of the subsidy with a similar institution of securing funds in criminal proceedings, which the Constitutional Court has repeatedly ruled on recently. In such cases, there is also a very strong public interest in limiting the property rights of persons suspected of property crime whose funds are secured for possible future reimbursement of their financial obligations towards the State or the victims. The Constitutional Court, in its case-law on this institute, stressed the role of the courts as defenders of proportionality between the protection of this public interest and the protection of the rights of the persons concerned. The purpose of the judicial review of the freezing of funds on the defendant's account is to assess the adequacy of this measure in the sense of the relationship between the seriousness of the crime under investigation and the extent of the detention in relation to the possibilities of the person concerned as an entrepreneur to continue to carry out activities related to the conduct of that activity [FTC 2485 / 13 of 2.12.2013 (N 206 / 71 of SbNU 429)]. The decision of the public authority on the request to limit the provision of funds must be duly justified, taking into account the scope of the collateral, the specificity of the criminal case being prosecuted and the occurrence of any material damage [FTC 3501 / 13 of 5.8.2014 and FTC 3502 / 13 of 17.4.2014 (available at http: / / nalus.ujud.cz)]. The Constitutional Court also referred to the time dimension of the Institute for the freezing of funds in the account - if the law enforcement authorities do not take into account the length of the criminal proceedings and the prognosis of its further development when deciding on the continued duration of the detention measure from the point of view of proportionality, they infringe the right to the protection of property rights under Article 11 (1) of the Charter in conjunction with Article 4 (1) and (4) of the Charter [Find sp. zn. III. ÚS 1396 / 07 of 19.3.2009 (N 62 / 52 SbNU 609)]]. All these requirements are, according to the decisions cited by the Constitutional Court, the role of general courts in order to balance the public interest and the rights of the persons concerned.
51. The decision of the provider to suspend the drawing of the subsidy is also justified by the public interest in protecting against breaches of the legal obligations of the beneficiary, in particular the breach of budgetary discipline or fraud, but the absence of judicial control in this case does not allow the beneficiary to take into account and protect the interests of the beneficiary and his legitimate expectations of drawing the subsidy already granted. Although it is clear that this expectation cannot be held by beneficiaries who have infringed the rules, the absence of judicial control does not allow those who have not infringed any rules to protect their legitimate expectations of the acquisition of the assets provided to them by a decision of the competent authority (Section 14 of the Budgetary Rules Act). In fact, the decision to grant the subsidy was based on a legitimate expectation that the beneficiary would be granted the subsidy and that, if all the rules were complied with, the funds granted would be paid to it within the specified deadlines. This does not change the provision of Section 14 of the Budget Rules Act that there is no legal claim on the subsidy because, after the decision to grant the subsidy under Section 14 (3) of the Budget Rules Act has been issued by the beneficiary, it is an enforceable claim. The decision to suspend the use of the subsidy is an intervention in the expectation that it will be fulfilled by virtue of this claim.
52. Even if the provider were subsequently to conclude that there was no breach of the beneficiary's obligations and subsequently paid to the beneficiary the suspended funds, the delay in making use of the subsidy granted by the State may constitute a serious interference with the beneficiary's property rights, as it may cause additional financial costs, the cost of the investment, or even the loss of the entire planned investment. Thus, even as a result of the suspension of the drawing-up of the subsidy, the beneficiary will normally be affected by the damage caused to it. The absence of a judicial review of the suspension of the subsidy, that is to say the impossibility of a judicial decision declaring the lawfulness of the subsidy provider's procedure, may therefore also make it impossible or difficult for the recipient of the recovery of the damage caused to him by an unjustified decision to suspend the subsidy, thereby also affecting his right of ownership.
53. The Constitutional Court concludes that the suspension of the payment of part of the subsidy under Section 14e of the Budget Rules Act is an intervention in the legitimate expectation of the beneficiary for the acquisition of assets, i.e. an intervention in the right to the protection of property and property rights, enshrined in Article 11 of the Charter and Article 1 of the Additional Protocol to the Convention. Therefore, this intervention by a public authority as an intervention in the basic right of the recipient must be subject to judicial review in accordance with the second sentence of Article 36 (2) of the Charter. The exclusion of judicial review provided for in the contested provision is therefore unconstitutional.
54. The appellant also took the view that, in addition to the immediate interference with the beneficiary's right of ownership, its right to engage and operate in other economic activities, protected by Article 26 of the Charter, would be violated in a number of cases. The Constitutional Court finds, in view of its above conclusions, that the contested provision is contrary to Article 1 (1) of the Constitution and Article 36 (2) of the Charter in relation to Article 11. The Charter for Excess to deal with the possibility of intervention where, following or in addition to the intervention in the legitimate expectation of obtaining the assets of the suspension of the drawing of the subsidy, the infringement of the right to business under Article 26 of the Charter may also cause infringement.
55. This does not mean that the Constitutional Court is not aware that the activities or activities of the beneficiary's other economic activity may be made more difficult or limited by suspending the subsidy already granted once. Even taking into account the chain of other interventions highlighted by the appellant, such as the suspension of construction works, possibly their preservation, which will lead to their destruction or auctioning. However, in order to establish an intervention in the beneficiary's right of judicial protection under Article 36 (2) of the Charter, the intervention resulting from the suspension of the use of the subsidy into the recipient's right of ownership is sufficient.
Application of European Union law
56. When examining the issue of judicial review of the provision and payment of subsidies, often coming from the resources of the European Union budget, the dimension of European Union law cannot be disregarded. The drawing-up of subsidies is provided for in Council Regulation (EC) No 1083 / 2006 of 11.7.2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund, Regulation (EC) No 1080 / 2006 of the European Parliament and of the Council of 5.7.2006 on the European Regional Development Fund, Commission Regulation (EC) No 1828 / 2006 laying down detailed rules for the implementation of that Regulation. The Court of Justice of the European Union has already ruled that Regulation No 1083 / 2006, cited above, read in conjunction with Article 47 of the Charter of Fundamental Rights of the European Union, which lays down the right to effective legal protection before a court, precludes a decision rejecting the application for a grant from the possibility of attacking them in a court of a Member State (judgment of the Court of Justice of 17 September 2014 in Case C-662 / 12 Liivimaa Lihaveis MTÜ against Eesti-Läti programmes 2007-2013 Seirekomitee). Therefore, according to the case law of the Court of Justice of the European Union, Member States have an obligation to ensure judicial review of even the acts granting a subsidy or grant from the budgets of the European Union when applying European Union law. The Court of Justice of the European Union also points out in the light of those considerations that the requirement of judicial review of any decision taken by a national authority is a general principle of Union law.
57. The subject of the regulation of European Union law is also protection against fraud and irregularities in the use of European Union budget subsidies. Article 325 (1) of the Treaty on the Functioning of the European Union states: "The Union and the Member States are fighting fraud and other infringements affecting the financial interests of the Union by measures taken pursuant to this Article which have a deterrent effect and provide effective protection in the Member States and in the Union institutions, bodies, offices and agencies. 'Council Regulation No 2988 / 1995 of 18.12.1995 on the protection of the European Communities' financial interests lays down general rules on uniform checks and administrative measures and penalties affecting irregularities - that is to say, any infringement of a Community law which has, or could have, the effect of prejudicing the general budget of the Community or the budgets managed by the Community - with regard to Community law, the checks, administrative measures and penalties must be" effective, proportionate and dissuasive 'and "subject to applicable Community law, the procedures for carrying out Community controls, measures and penalties shall be governed by the law of the Member States'.
58. The quoted rules on European Union law, with the stated aim of combating the discrepancies identified there in the drawing-up of Union funds, lay down the institutional and procedural framework for its achievement in the form of controls, administrative measures and penalties, both at the level of the Union institutions and at the level of the Member States. According to the above rules, the provider (the managing authority) is obliged to check and report to the European Commission any irregularities through the European Anti-Fraud Office (OLAF). The procedural arrangements excluding judicial control make it impossible for the beneficiary to call for checks against the intervention, but also prevent the harmonisation of the Member States' action against irregularities in drawing up European subsidies. In the context of judicial scrutiny, the question referred to the Court of Justice of the European Union should resolve the ambiguities as to whether or not there is an irregularity within the meaning of European law and thus the unification of a common European action against acts threatening the financial interests of the European Union.
59. The Constitutional Court has already concluded, in its finding in the case of the European Arrest Warrant of 3.5.2006 sp. zn. Pl. ÚS 66 / 04 (N 93 / 41 SbNU 195; 434 / 2006 Coll.; paragraph 61), that Article 1 (2) of the Constitution, in conjunction with the principle of cooperation laid down in Article 10 of the Treaty on European Communities (now the principle of loyal cooperation in Article 4 of the Treaty on European Union), results in a constitutional principle whereby domestic legislation, including the Constitution, is to be interpreted in line with the principles of European integration and cooperation of the Union and Member State authorities. Therefore, if there are several interpretations of the Constitution or the Charter of Fundamental Rights and Freedoms, and only some of them lead to a commitment that the Czech Republic has assumed in connection with its membership in the European Union, an interpretation that supports the implementation of this commitment and not an interpretation that makes it impossible.
60. It is not for the Constitutional Court to assess the content of European law, but it is already apparent from the recap indicated that the introduction of a judicial review in the case at hand is not contrary to the law of the European Union; on the contrary, its absence could be in conflict with the case law of the Court of Justice of the European Union or the Charter of Fundamental Rights of the European Union. The above conclusions of the Constitutional Court on the inconstitutionality of the judicial exclusion of the suspension of the drawing of the subsidy are therefore not contrary to European Union law. The contested legislation could even be found problematic from the perspective of European Union law. However, the Constitutional Court is convinced that the appellant has chosen the right procedure when he first referred the issue to the Constitutional Court, since the General Court has initiated proceedings leading to the abolition of the provisions of the European Union's law by instruments of constitutional review, there is no reason to prevent it from doing so or to force it before the Court of Justice of the European Union (cf. Bobek, M. Bříza, P. Komárek, J. National application of European Union law. Prague: C. H. Beck, 2011, p. 483). According to the Court of Justice of the European Union (cf. Decision Melki and Abdeli, C-188 / 10 and C-189 / 10 [I-5667]), the procedure for a priority assessment of compliance with the constitutional order is not contrary to Union law, unless the Court of Justice is prevented at any time from contacting the Court of Justice with a preliminary question, to take the necessary interim measures to protect the rights arising from Union law and to not apply the conflicting provisions of national law [cf. also the finding of the Constitutional Court of First Instance, sp. II. ÚS 1009 / 08 of 8. 1. 2009 (N 6 / 52 SbNU 57)].
61. The decision of the Constitutional Court on the inconstitutionality of the contested section of Section 14e of the Budget Rules Act is therefore consistent with the international obligations of the Czech Republic and with the principle of loyal cooperation within the European Union.
Conclusion
62. The Constitutional Court found that, pursuant to the provisions of Section 14e of the Law on budgetary rules in the version effective until 19 February 2015, the unchecked and unrestricted reasoning of the provider was sufficient to suspend the payment of the subsidy for an unlimited period of time, which was sufficient to conclude that the rules of its drawing had been infringed. Under such conditions, the exclusion of judicial review makes it impossible to protect the legitimate expectations of the recipient against any arbitrary provider. The principle of legal certainty should be interpreted in conjunction with the prohibition of arbitrariness in such a way that the discretion of the public authorities is limited by procedures to prevent the abuse of such discretion, with the best prevention and subsequent protection against arbitrariness in the procedure of public authorities being access to a court of administrative discretion subject to judicial control. In view of the context of the whole legal provision, judicial control is the only protection against arbitrariness that allows the legislator to have an open margin of discretion of the provider. Thus, the contested part of the provision, which provides, in the context described above, for the exclusion from judicial review, is, first and foremost, contradictory to Article 1 (1) of the Constitution, which guarantees the maintenance of the fundamental principles of the material rule of law, namely the protection of legal certainty, the prohibition of arbitrariness and access to the courts. The suspension of the payment of part of the subsidy under Section 14e of the Budget Rules Act is an intervention in the legitimate expectation of the beneficiary for the acquisition of assets, i.e. an intervention in the right to the protection of property and property rights, enshrined in Article 11 of the Charter and Article 1 of the Additional Protocol to the Convention, and therefore its judicial review cannot be excluded under Article 36 (2) of the Charter.
63. The Constitutional Court therefore, for the abovementioned reasons, the appellant's application pursuant to Article 95 (2) The Constitution has complied with Article 89 (2) The Constitution is obliged by the public authorities to reflect the consequences of the alleged unconstitutionality in their decision-making practice, namely when dealing with the specific cases of the provisions of § 14e (4) of Act No. 218 / 2000 Coll., on budgetary rules and on the amendment of certain related laws (budgetary rules), as effective by 19 February 2015, in words "and it is impossible to apply its judicial review '.
President of the Constitutional Court:
JUDr. Rychetský v. r.
Different opinions under Article 14 of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended, were taken by Judges Vladimir Krórek, Vladimir Sládeček and Radovan Suchánek for a decision.
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Regulation Information
| Citation | The Constitutional Court found No 177 / 2015 Coll., on the application to declare the unconstitutional part of the provision of § 14e (4) of Act No. 218 / 2000 Coll., on budgetary rules and on the amendment of certain related laws (budgetary rules), as amended by 19 February 2015 |
|---|---|
| Regulation Type | The Constitutional Tribunal found |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 23.07.2015 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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