The Constitutional Court ... has reviewed the case on the constitutionality of several provisions of the Customs Code of the Russian Federation in a public hearing.

[...]

1. The public joint stock companies "AutoVAZ" and "Combinat Severonikel", limited liability company "Vernost", limited liability partnership "The Russian-South-African Joint Venture "Econt", and a private entrepreneur A.D. Chulkov argue that Article 231(6) of the Customs Code of the Russian Federation is unconstitutional. The above mentioned article states that enterprises, organizations, as well as persons carrying business activities without creating a legal entity, may be held liable for a breach of the Customs rules unless such a breach resulted from an act of God.

Besides, "Vernost Ltd" has requested to review the constitutionality of Article 230, Article 291(6) and Paragraph 4 of Article 320 of the Customs Code of the Russian Federation.

"AutoVAZ" has requested to review the constitutionality of Paragraph 4 of Article 320 of the Customs Code of the Russian Federation. A private entrepreneur A.D. Chulkov has requested to review the constitutionality of Article 230 of the Customs Code of the Russian Federation. These claimants argue that the above mentioned articles demonstrate the anti-constitutionality of Article 231(6) of the Customs Code of the Russian Federation:

Article 230 states that an act or omission to act is a breach of the Customs rules, but it does not state that such an act or omission to act has to result due to a breaching party's fault. Article 291(6) states that a breach of the customs rules by an organization or an individual entrepreneur carrying on business activities without creating a legal entity is not actionable only if a breach resulted from an act of God. Paragraph 4 of Article 320 set forth that the fact of a breach should be proven in an action on a breach of the customs rules by an organization or an individual entrepreneur, carryingon business activities without creating a legal entity, while in a case of either a physical person or an official their fault needs to be established.

[...]

According to the claimants, these provisions allow for liability for the fact of a breach of the Customs rules itself irrespectively to presence or absence of fault on the part of the breaching enterprises, organizations, as well as entities carrying business activities without creating a legal entity. Therefore, the claimants argue that such provisions are against the principles of justice set forth in the Constitution of the Russian Federation (Articles 1 and 7), the principles of equality between persons and legal entities (Article 19(1)), the principle of proportionality of liability (Article 55(3)), the principle of presumption of innocence (Article 49), as well as they infringe the right to private property (Articles 8 and 35) and the right to carry business activities (Article 34).

1.1 [...]

When making a decision about who shall have the burden of proof, a legislator may - if the opposite is not required by a certain Customs rule - relieve the state authorities from such a burden moving it to defendants. However, the defendants should be given an opportunity to prove the lack of fault on their part.

According to the provisions of the Customs Code in controversy, the enterprises, organizations, and entities carrying business activities without creating a legal entity cannot be denied the right to prove that a certain offense of the Customs rules resulted from extraordinary circumstances. Such circumstances shall be either the ones which cannot be reasonably prevented or any other unforeseeable, unavoidable impediments beyond their control. A proof of reasonable care is required.

Such regulations -- concerning the burden of proof which the parties to international business transactions for the sale of goods, provision of services, exchange of information, intellectual property have - can be found in many international treaties which have been recognized by the Russian Federation and have become a part of its legal system (Article 15(4) of the Constitution of the Russian Federation). Thus, the United Nations Convention on Contracts for the international sale of goods states that "a party is not liable for a failure to perform any of his obligations if he proves that the failure was due to an impediment beyond his control and that he could not reasonably be expected to have taken the impediment into account at the time of the conclusion of the contract or to have avoided or overcome it or its consequences." (Article 79(1)).

Several other international treaties also allow that a person/entity, whose liability does not have to be proven by the governmental authorities, experiences the consequences of his/its breach of the Customs rules. However, such a person/entity is allowed to prove his/its innocence.

The Russian Federation cannot ignore the above mentioned rules in its customs regulations since the interests of protection of the economic basis of its sovereignty require to recognize the principle of unity and reciprocity according to which a State should not place itself in a situation where its customs regimes are less favorable than in other States. This principle is reflected in the Resolution of 14 May 1999 of the Constitutional Court of the Russian federation on case involving the constitutionality of Article 131(1) and Article 380(1) of the Customs Code of the Russian Federation.

The customs relations, arising in connection with the moving of goods through the customs border, are directly connected with the property rights of both foreign and Russian parties whose duty is to fulfill the customs obligations. Besides the fulfillment of the customs obligations depends on fulfillment of property rights of the relevant parties.

The right of a subject of the customs relations to prove his/its innocence corresponds with his/its opportunity to take such steps in fulfillment of his/its obligations which would allow him/it to fulfill his/its customs obligations ...

FOOTNOTE

* Yelena Kalika, a law student at the Pace University School of Law, has studied at the Moscow State Law Academy, interned with a Moscow law firm, and is a Research Assistant at the Pace Institute of International Commercial Law.

All translations should be verified by cross-checking against the original text.

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Pace Law School Institute of International Commercial Law - Last updated September 17, 2004

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