The Constitutional Court recognized a norm prohibiting certain groups of persons to drive an automobile, which is permanently registered in a foreign state, in the road traffic in the territory of Latvia
On 30 January 2012, the Constitutional Court adopted a judgment in the case No. 2011-09-01 “On Compliance of Section 9 (4) of the Road Traffic Law with Article 91 and Article 105 of the Satversme of the Republic of Latvia”.
On the right of the State to restrict use of cars registered abroad in the territory of Latvia
Contested Norm
Section 9 (4) of the Road Traffic Law provides: “It is prohibited to drive an automobile, which is permanently registered in a foreign state, in the road traffic in the territory of Latvia, except the cases referred to in Paragraph five of this Section, for a person who is a citizen or non-citizen of Latvia, as well as for a person who has received a registration certificate, a permanent residence certificate or residence permit issued in Latvia”. (Section 9 (5) of the Road Traffic Law establishes certain exceptions when persons referred to in Section 9 (4) shall have the right to drive an automobile, which is permanently registered in a foreign state.)
The Facts
The Applicant – a European association „BTA” is registered in the Republic of Latvia. Its field of activities is insurance. Employees of the Applicant and its affiliates fulfil their work duties in several states. To perform international deals, vehicles of the Applicant are used.
Due to the restriction established in the Contested Norm, the Applicant cannot transfer its automobiles registered in foreign states to its employees to fulfil their working duties, provided that the latter are citizens of Latvia and they do no work abroad. Consequently, the Applicant cannot organize its commercial activities on optimal basis because the Contested Norm prohibits it the possibility to freely use its property, i.e. automobiles registered in a foreign state. Owners have the right to manage, use their property and gain all possible profits from it, as well as transfer it to other persons for or without remuneration.
Findings and Ruling of the Court
On content of Article 105 of the Satversme
When assessing whether the Contested Norm establishes a restriction of fundamental rights established in Article 105 of the Satversme, the Constitutional Court concluded that an automobile is a movable property in circulation, and its owner has the right to use it. Consequently, the right of the Applicant to use all automobiles owned by it pertains to the content of fundamental rights established in Article 105 of the Satversme.
On legitimate aim of the Contested Norm
In its case-law, the Constitutional Court has reiterated that the State shall have the duty to form, in the interests of welfare of the society, an effective tax collection system. The State has the right to commit persons paying taxes, and this duty of persons as such does not infringe the fundamental rights. In the present case, the Court also concluded that the Contested Norm assures a more effective collection of fees and taxies established in Latvia. This facilitates use of automobiles registered in Latvia in road traffic in the territory of Latvia and ensures that taxes for vehicles used in road traffic in Latvia are paid in Latvia. According to the Court, the Contested Norm facilitates collection of administrative fines and observance of technical requirements required in respect to vehicles [11].
The Constitutional Court recognized that the legitimate aim of the Contested Norm is to protect welfare of the society and rights of other persons [11].
On compliance of restrictions included in the Contested Norm with the principle of proportionality
Observing the procedure for collecting the vehicle exploitation tax and enterprise automobile tax established in the Republic of Latvia, as well as that of collecting of administrative fines for violations in respect to the road traffic in events if an automobile is registered in a foreign state, and the procedure for performing annual technical control of vehicles, the Constitutional Court concluded that the Contested Norm is appropriate for reaching of the legitimate objective [13].
On alternative solutions
The Court assessed alternatives suggested in the application that would, according to the Applicant, reach the legitimate aim of the Contested Norm.
The Applicant indicates that the legislator could have permitted inhabitants of Latvia to use automobiles, which are permanently registered in a foreign state, in the road traffic in the territory of Latvia by also committing them to apply for a driving permission and pay respective taxes. The Constitutional Court concluded that the above mentioned solution would not assure reaching of the legitimate aim of the Contested Norm at the same quality because it would not facilitate road traffic safety. This would mean that vehicles without technical control performed in Latvia would circulate in road traffic of the State. Moreover, there would be no legal mechanism stimulating persons registering their vehicles in Latvia rather than a foreign state [14].
The Applicant also held that the legislator could commit persons to paying a tax or duty of a certain amount for the use of roads of Latvia when entering the territory of the State. However, the Court is of the opinion that taxes or duties for the use of roads of Latvia are not the most appropriate alternative measure to reach the aims of the Contested Norms. Such hypothetical introduction of tax would not protect participants of traffic from use of automobiles registered abroad and non-compliant with technical requirements in traffic of Latvia; neither this would replace transport taxes established in the particular normative regulatory framework [14].
When assessing the above mentioned measures, the Court concluded that suggested alternatives do not ensure reaching of the aim of the Contested Norm at the same quality [14].
On proportionality of benefit gained by the society and restriction of the rights of a person
The Constitutional Court indicated that the Contested Norm does not establish a general prohibition to the Applicant regarding the use of its automobiles, which is permanently registered in a foreign state, in the road traffic in the territory of Latvia. Quite on contrary, in Section 9 (5) of the Road Traffic Law, it includes a reference to exceptions. Persons referred to in the exceptions can use an automobile, which is permanently registered in a foreign state, in the road traffic in the territory of Latvia [15].
Taking into account the fact that the Applicant works in seven Member States of the EU and its commercial activities are fulfilled by its employees, them being both, inhabitants of Latvia and employees of foreign affiliates, the Constitutional Court concluded that the Applicant is able to comply with the prohibition established in the Contested Norm by means of its resources [15].
The Court recognized that the benefit gained by the society from the Contested Norm is greater than restriction of property right of the Applicant. Consequently, the Contested Norm does comply with Article 105 of the Satversme [15].
On compliance of the Contested Norm with the principle of equality
When assessing criteria, according to which compliance with the principle of equality would be established, the Constitutional Court concluded that all persons who use automobiles, which are permanently registered in a foreign state, in the road traffic in the territory of Latvia and those who use an automobile permanently registered in the Republic of Latvia enjoy equal and comparable conditions. The Court concluded that the Contested Norm does provide a different attitude to both of these groups of persons under consideration [20].
Taking into account the fact that the prohibition included in the Contested Norm to driving of an automobile, which is permanently registered in a foreign state, in the road traffic in the territory of Latvia in respect to a certain group of persons, the Constitutional Court applied the conclusions to assessment of compliance of the Contested Norm with the principle of equality [22].
The Court also concluded that by means of Section 9 (5) of the Road Traffic Law, the legislator has considerably reduced number of cases when persons driving automobiles in the territory of Latvia is treated differently [23].
The Constitutional Court also assessed case-law of the European Court of Justice and requirements of the European Commission in respect to registration of vehicles in the country where they are used. It concluded that establishment of easements for the use of automobiles registered in a Member State of the EU in road traffic in another Member State is, first of all, issue of harmonisation of Member State rights [25].
The Court indicated that the different attitude towards the groups of persons established in the Contested Norm has an objective and reasonable grounds, and it does not infringe the principle of equality enshrined in the first sentence of Article 91 of the Satversme.
The Constitutional Court recognized Section 9 (4) of the Road Traffic Law as compliant with Article 91 and Article 105 of the Satversme of the Republic of Latvia.
The judgment of the Constitutional Court is final and not subject to appeal, it shall come into force on the date of publishing it.
Linked case: 2011-09-01