4 June 2010 № 451/2010
DECISION OF THE CONSTITUTIONAL COURT OF THE REPUBLIC OF BELARUS
the 4 of June 2010 No. D-451/2010
On the conformity of the Law of the Republic of Belarus “On Making Alterations and Addenda to Some Laws of the Republic of Belarus on the Prevention of Legalisation of Proceeds from Crime and Financing of Terrorist Activities” to the Constitution of the Republic of Belarus
The Constitutional Court of the Republic of Belarus comprising the Presiding Officer – Chairman of the Constitutional Court of the Republic of Belarus P.P. Miklashevich, Deputy Chairman A.V. Maryskin, judges T.S. Boiko, T.V. Voronovich, S.Y. Danilyuk, V.P. Isotko, L.G. Kozyreva, V.V. Podgrusha, O.G. Sergeeva, A.G. Tikovenko, S.P. Chigrinov
on the basis of part one of Article 116 of the Constitution of the Republic of Belarus, subpoint 1.1 of point 1 and point 3 of the Decree by the President of the Republic of Belarus of June 26, 2008 No. 14 “On Certain Measures to Improve the Activities of the Constitutional Court of the Republic of Belarus”
in open court session in the exercise of obligatory preliminary review considered the constitutionality of the Law of the Republic of Belarus “On Making Alterations and Addenda to Some Laws of the Republic of Belarus on the Prevention of Legalisation of Proceeds from Crime and Financing of Terrorist Activities”.
Having heard the reporting judge T.S. Boiko, having analysed the provisions of the Constitution of the Republic of Belarus (hereinafter – the Constitution), of the Law of the Republic of Belarus “On Making Alterations and Addenda to Some Laws of the Republic of Belarus on the Prevention of Legalisation of Proceeds from Crime and Financing of Terrorist Activities” and other legislative acts of the Republic of Belarus, the Constitutional Court found the following.
The Law of the Republic of Belarus “On Making Alterations and Addenda to Some Laws of the Republic of Belarus on the Prevention of Legalisation of Proceeds from Crime and Financing of Terrorist Activities” (hereinafter – the Law) was adopted by the House of Representatives of the National Assembly of the Republic of Belarus on May 6, 2010, approved by the Council of the Republic of the National Assembly of the Republic of Belarus on May 28, 2010 and submitted for signing by the President of the Republic of Belarus.
The Law makes alterations and addenda to the laws of the Republic of Belarus “On Measures to Prevent Legalisation of Ill-Gotten Proceeds and Financing of Terrorist Activities” (hereinafter – the Law on Measures to Prevent Legalisation of Proceeds) (article 1), “On Currency Regulation and Currency Control” (article 3), “On Fighting Corruption” (article 4), “On Fighting Organised Crime” (article 5) and to the Banking Code of the Republic of Belarus (article 2).
The adoption of the Law proceeds from the necessity to bring into line the above mentioned legislative acts with norms of international law, as well as to reconcile the provisions of the Law on Measures to Prevent Legalisation of Proceeds with norms of the Edict by the President of the Republic of Belarus of November 4, 2008 No. 601 “On Certain Issues of Financial Transactions by Banks”.
While reviewing constitutionality the Court proceeds from the following.
1. The measures to prevent legalisation of proceeds from crime and financing of terrorist activities represent one of the ways to perform tasks of the Republic of Belarus as a sovereign state ruled by law which have been enshrined in part three of Article 1 of the Constitution. These tasks are to ensure legality and law and order. It is established in the Constitution that the state shall take all measures at its disposal to create the domestic and international order necessary for the exercise in full of the rights and liberties of the citizens of the Republic of Belarus that are specified in the Constitution (part one of Article 59).
Alterations and addenda to the Law on Measures to Prevent Legalisation of Proceeds aim primarily to specify the scope of application of the law. It covers the prevention of legalisation of proceeds from crime and financing of terrorist activities. That is why the notion of “ill-gotten proceeds” in the title and relevant provisions of the said Law has been changed to “proceeds from crime”. Furthermore the proceeds from crime include funds provided from the commission of a crime as well as those derived from their use (paragraph six of point 2 of article 1 of the Law).
The Constitutional Court points to the fact that alterations and addenda to the Law on Measures to Prevent Legalisation of Proceeds conform in matter to the provisions of international conventions – International Convention for the Suppression of the Financing of Terrorism of December 9, 1999 (entered into force for the Republic of Belarus on October 6, 2004), International Convention for the Suppression of Acts of Nuclear Terrorism of April 13, 2005 (entered into force for the Republic of Belarus on July 7, 2007), United Nations Convention against Transnational Organised Crime of November 15, 2000 (entered into force for the Republic of Belarus on September 29, 2003), United Nations Convention against Corruption (entered into force for the Republic of Belarus on December 14, 2005), Criminal Law Convention on Corruption of January 27, 1999 (entered into force for the Republic of Belarus on March 1, 2008) as well as Treaty of the CIS Member States on Prevention of Legalisation of Proceeds from Crime and Financing of Terrorism of October 5, 2007 (entered into force for the Republic of Belarus on September 23, 2008).
In accordance with the Law (paragraph two of point 2 of article 1) the term of “beneficial owner” is introduced into the Law on Measures to Prevent Legalisation of Proceeds in conformity with the provisions of the United Nations Convention against Corruption (article 52).
2. A number of alterations and addenda to the Law on Measures to Prevent Legalisation of Proceeds specifies the rights and duties of persons carrying out financial transactions, establishes standard requirements to identification of the parties to those transactions, lowers the threshold amount for those transactions which require the customers’ identity to be disclosed as well as specifies the competence of the financial monitoring body to suspend financial transactions.
According to Article 28 of the Constitution everyone has the right to protection against unlawful interference with one's private life, including encroachments on the privacy of one's correspondence and telephone and other communications, and on one's honour and dignity.
While reviewing the norms of the Law (points 5, 7 of article 1), which prescribe the identification of the parties to a financial transaction by finding out and fixing the surname of a physical person, his proper name, patronymic (if any), citizenship, date and place of birth, place of residence (temporary residence), requisite elements of an identity document, taxpayer identification number (if any), the Constitutional Court considers them to impose a certain restriction on the rights and freedoms of the individual and the citizen stipulated in the Constitution. Therewith in pursuance of the provisions of Article 23 of the Constitution under which the restriction of personal rights and liberties shall be permitted only in the instances specified in law, in the interest of national security, public order, the protection of the morals and health of the population as well as rights and liberties of other persons, the Constitutional Court is of the opinion that the legislator, who establishes the legal mechanism to prevent legalisation of proceeds from crime and to block financing of terrorism, has the right to prescribe measures either preventing legalisation of proceeds from crime and financing of terrorist activities or finding out physical and legal persons committing such actions as well as to oblige persons carrying out financial transactions to identify the parties to financial transactions. For the Law on Measures to Prevent Legalisation of Proceeds aims to protect the rights and legitimate interests of the citizens of the Republic of Belarus, its society and the state by way of legal and organisational preventing measures against proceeds from crime and financing of terrorist activities.
The Constitutional Court also emphasises the provisions of the new wording of the Law on Measures to Prevent Legalisation of Proceeds, provided in point 5 of article 1 of the Law, which stipulate the duties of the persons carrying out financial transactions to suspend them, to find out beneficial owners of their parties – organisations if there are any agreements concluded to operate in writing; to find out among the parties to financial transactions PEP (politically exposed persons) of foreign states and international organisations (higher state officials of foreign states, leaders of international organisations and their permanent representations in the Republic of Belarus, as well as organisations of which they are beneficial owners. Moreover, the parties may be refused a financial transaction (except for crediting an account of the addressee with coming cash assets) in the case when the documents (data) necessary to identify those persons and (or) to register a financial transaction, which is subject to a special control, are not provided. Either suspension or refusal to carry out a financial transaction do not involve the liability of the person who carries out them for any damages and moral injury, incurred as a result of such action.
The Constitutional Court considers the said provisions to be restricting constitutional rights, the right of property in particular (articles 13, 44 of the Constitution), the citizen’s right to recover, through the courts, both property damage and financial compensation for moral injury (Article 60 of the Constitution). They also affect the system of principles that define and regulate civil relations, primarily the freedom of contract and inadmissibility of arbitrary interference in private affairs.
In Article 13 of the Constitution it is prescribed that the state shall grant equal rights to all to conduct economic and other activities, other than those prohibited by law (part two) and shall guarantee to everyone equal opportunities for free utilisation of abilities and assets for business and other types of economic activities (part four). According to Article 44 of the Constitution the state shall guarantee everyone the right of property and shall contribute to its acquisition (part one); a proprietor has the right to possess, enjoy and dispose of assets either individually or jointly with others; the inviolability of property and the right to inherit property shall be protected by law (part two). In pursuance of part two of article 2 of the Civil Code of the Republic of Belarus the citizens and legal persons are free to make contracts (paragraph seven), as to interference with one’s private affairs, it shall be inadmissible except for the cases when it is provided by legal norms in the interests of national security, social order, protection of morals, health of the population, rights and freedoms of other persons (paragraph nine).
Meanwhile pursuant to part one of Article 23 of the Constitution providing for certain restriction by law of the rights and freedoms together with part six of Article 44 of the Constitution stipulating that the exercise of the right of property shall not be contrary to social benefit and security, or be harmful to the environment or historical and cultural treasures, or infringe upon the rights and legally protected interests of others, the Constitutional Court is of the opinion that the right of property may be restricted to the extent required by the principle of proportionality in restriction of the rights and freedoms. The legal position formulated in the Message of the Constitutional Court of the Republic of Belarus “On Constitutional Legality in the Republic of Belarus, 2009” says that restrictions on constitutional rights should be legally admissible, socially justified; they should meet the equity requirements and be adequate, commensurable and necessary to protect other constitutional values. In the instances where constitutional rules permit the legislator to impose restrictions on rights and freedoms they should not falsify the essence of constitutional rights and freedoms.
So, despite the fact that the suspension of a financial transaction or its refusal as well as other restrictions provided by the Law affect the constitutional right of property of the parties to financial transaction, they turn to be lawful and admissible as being established at a law level and meeting the commensurability requirements. While providing for such restrictions the legislator creates one of the prerequisites to prevent legalisation of proceeds from crime and financing of terrorist activities thereby safeguarding national security, social order, morals and health of the population, rights and freedoms of others.
The Constitutional Court also points to that these restrictions are in line with the state duty, specified in Article 44 of the Constitution, to take measures safeguarding the citizens’ property acquired in accordance with law.
3. With a view to implement the principle of legal certainty implying clarity, accuracy, consistency and logical coherence of legal norms, as well as due to the reduction of the scope of application of the Law on Measures to Prevent Legalisation of Proceeds by the frameworks of the prevention of legalisation of the proceeds which come only from crime, appropriate alterations are made to several legislative acts of the Republic of Belarus. Such an approach conforms to the norms of the Law of the Republic of Belarus “On Normative Legal Acts of the Republic of Belarus” specifying the obligatory unified systematisation of normative legal acts offering internal consistency (articles 5, 9, 10), as well as conformity with constitutional provisions on the state based on the rule of law and supremacy of law (articles 1, 7).
The Law has been adopted by the House of Representatives of the National Assembly of the Republic of Belarus within its competence pursuant to point 2 of part one of Article 97 of the Constitution and approved by the Council of the Republic of the National Assembly of the Republic of Belarus under point 1 of part one of Article 98 of the Constitution. The houses of the National Assembly of the Republic of Belarus have acted within their competence provided by articles 97-100 of the Constitution.
In view of the foregoing the Constitutional Court concludes that as to the content of the norms, form of the act and procedure of its adoption, the Law is not contrary to the Constitution.
Guided by parts one, seven of Article 116 of the Constitutions of the Republic of Belarus, parts eight, thirteen, fourteen of Article 24 of the Code of the Republic of Belarus on Judicial System and Status of Judges, subpoint 1.1 of point 1 and point 3 of the Decree by the President of the Republic of Belarus of June 26, 2008 No. 14 “On Certain Measures to Improve the Activities of the Constitutional Court of the Republic of Belarus”, the Constitutional Court
RULED:
1. To recognise the Law of the Republic of Belarus “On Making Alterations and Addenda to Some Laws of the Republic of Belarus on the Prevention of Legalisation of Proceeds from Crime and Financing of Terrorist Activities” to be conforming to the Constitution of the Republic of Belarus.
2. The present decision shall come into legal force from the date of its adoption.
3. To publish the present decision in accordance with legislation.
Presiding Officer-
Chairman of the Constitutional Court
of the Republic of Belarus
P.P.Miklashevich