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On the powers of a court deciding on the abolishment of the validity of licences permitting retail trading in tobacco products

Case No. 71/06-12/07

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

RULING

ON THE COMPLIANCE OF PARAGRAPH 5 (WORDING OF 20 NOVEMBER 2003) AND PARAGRAPH 17 (WORDING OF 20 NOVEMBER 2003) OF ARTICLE 26, AND ARTICLE 33 (WORDING OF 20 NOVEMBER 2003) OF THE REPUBLIC OF LITHUANIA’S LAW ON TOBACCO CONTROL, AS WELL AS ITEM 39 (WORDING OF 18 DECEMBER 2006) AND ITEM 40 (WORDING OF 18 DECEMBER 2006) OF THE RULES FOR LICENSING RETAIL TRADE IN TOBACCO PRODUCTS AS APPROVED BY THE RESOLUTION OF THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA (NO. 383) “ON APPROVING THE RULES FOR LICENSING RETAIL TRADE IN ALCOHOL PRODUCTS AND THE RULES FOR LICENSING RETAIL TRADE IN TOBACCO PRODUCTS” OF 7 APRIL 2004 WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

17 September 2008
Vilnius

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Armanas Abramavičius, Toma Birmontienė, Pranas Kuconis, Kęstutis Lapinskas, Zenonas Namavičius, Egidijus Šileikis, Algirdas Taminskas, and Romualdas Kęstutis Urbaitis

The court reporter—Daiva Pitrėnaitė

Neringa Pažūsienė, Director of the Law and Public Procurement Department of the Ministry of Economy of the Republic of Lithuania, Romalda Zutkienė, chief specialist of the Internal Trade Division of the Trade Department of the Ministry of Economy (representing the Government of the Republic of Lithuania, a party concerned, in the part of the case subsequent to the petition (No. 1B-12/2007) of the Vilnius Regional Administrative Court, the petitioner), acting as the representatives of the Government of the Republic of Lithuania, a party concerned

The Constitutional Court of the Republic of Lithuania, pursuant to Articles 102 and 105 of the Constitution of the Republic of Lithuania and Article 1 of the Law on the Constitutional Court of the Republic of Lithuania, in its public hearing, on 8 September 2008, considered constitutional justice case No. 71/06-12/07 subsequent to the following:

1) the petition (No. 1B-75/2006) of the Vilnius Regional Administrative Court, the petitioner, requesting an investigation into whether Paragraph 5 (wording of 20 November 2003) of Article 26 of the Republic of Lithuania’s Law on Tobacco Control to the extent that, according to the petitioner, it does not provide for an opportunity not to apply the sanction—the repeal of the validity of the licence—after account is taken of the character of the violation, the circumstances mitigating the liability as well as of other important circumstances, and Paragraph 17 (wording of 20 November 2003) of Article 26 of the Republic of Lithuania’s Law on Tobacco Control to the extent that it provides that new licences shall not be issued to the enterprises the validity of whose licences is repealed in accordance with Paragraph 5 of this article, are not in conflict with the constitutional principles of justice and a state under the rule of law;

2) the petition (No. 1B-12/2007) of the Vilnius Regional Administrative Court, the petitioner, requesting an investigation into:

whether Paragraph 5 (wording of 20 November 2003) of Article 26 of the Republic of Lithuania’s Law on Tobacco Control, as well as the provisions “The validity of the licences held by enterprises shall be repealed, if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) <…> a corresponding decision of <…> the State Tobacco and Alcohol Control Service regarding the imposition of a <…> penalty for <…> the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof <…> has become effective” and “New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article” of Paragraph 17 of the same article are not in conflict with Paragraph 5 of Article 31, Paragraph 1 of Article 109 of the Constitution of the Republic of Lithuania and the constitutional principles of justice and a state under the rule of law;

whether Item 39.6 of the Rules for Licensing Retail Trade in Tobacco Products as approved by Item 1.1 of the Resolution of the Government of the Republic of Lithuania (No. 383) “On Approving the Rules for Licensing Retail Trade in Alcohol Products and the Rules for Licensing Retail Trade in Tobacco Products” of 7 April 2004 is not in conflict with Paragraph 5 of Article 31, Paragraph 1 of Article 109 of the Constitution of the Republic of Lithuania and the constitutional principles of justice and a state under the rule of law;

whether the Third Section of Item 40 of the Rules for Licensing Retail Trade in Tobacco Products as approved by Item 1.1 of the Resolution of the Government of the Republic of Lithuania (No. 383) “On Approving the Rules for Licensing Retail Trade in Alcohol Products and the Rules for Licensing Retail Trade in Tobacco Products” of 7 April 2004 is not in conflict with Paragraph 1 of Article 109 of the Constitution of the Republic of Lithuania and the constitutional principles of justice and a state under the rule of law.

By the Constitutional Court’s Decision “On Joining Petitions” of 1 October 2007, petitions No. 1B-75/2006 and No. 1B-12/2007 of the Vilnius Regional Administrative Court, the petitioner, were joined into one case.

The Constitutional Court

has established:

I

1. The Vilnius Regional Administrative Court, the petitioner, considered an administrative case. By its ruling the court suspended the consideration of the case and applied to the Constitutional Court with a petition (No. 1B-75/2006) requesting an investigation into whether Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law on Tobacco Control (hereinafter also referred to as the Law) to the extent that, according to the petitioner, it does not provide for an opportunity not to apply the sanction—the repeal of the validity of the licence—after account is taken of the character of the violation, the circumstances mitigating the liability as well as of other important circumstances, and Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law to the extent that it provides that new licences shall not be issued to the enterprises the validity of whose licences is repealed in accordance with Paragraph 5 of this article, are not in conflict with the constitutional principles of justice and a state under the rule of law.

2. The Vilnius Regional Administrative Court, the petitioner, considered an administrative case. By its ruling the court suspended the consideration of the case and applied to the Constitutional Court with a petition (No. 1B-12/2007) requesting an investigation into:

whether Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law, as well as the provisions “The validity of the licences held by enterprises shall be repealed, if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) <…> a corresponding decision of <…> the State Tobacco and Alcohol Control Service regarding the imposition of a <…> penalty for <…> the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof <…> has become effective” and “New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article” of Paragraph 17 of the same article are not in conflict with Paragraph 5 of Article 31, Paragraph 1 of Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law;

whether Item 39.6 of the Rules for Licensing Retail Trade in Tobacco Products (hereinafter also referred to as the Rules) as approved by Item 1.1 of the Government Resolution (No. 383) “On Approving the Rules for Licensing Retail Trade in Alcohol Products and the Rules for Licensing Retail Trade in Tobacco Products” of 7 April 2004 (hereinafter also referred to as government resolution No. 383 of 7 April 2004) is not in conflict with Paragraph 5 of Article 31, Paragraph 1 of Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law;

whether the Third Section of Item 40 of the Rules as approved by Item 1.1 of government resolution No. 383 of 7 April 2004 is not in conflict with Paragraph 1 of Article 109 of the and the constitutional principles of justice and a state under the rule of law.

II

1. The petition (No. 1B-75/2006) of the Vilnius Regional Administrative Court, the petitioner, is substantiated by the following arguments.

The imperative legal regulation consolidated in Paragraphs 5 and 17 (wording of 20 November 2003) of the Law is impugned, whereby for each violation provided for in Items 1, 2, 3 or 4 of Paragraph 3 of Article 14 of the Law the validity of the licence must be repealed for good. In some cases, this sanction imposed upon the violator can be clearly too big and disproportionate to the committed violation and, therefore, unfair, especially when another sanction, a fine, has been imposed on him for the same violation. Such legal regulation is in conflict with the principles of reasonableness, proportionality and justice which arise from the principle of a state under the rule of law.

2. The petition (No. 1B-12/2007) of the Vilnius Regional Administrative Court, the petitioner, is substantiated by the following arguments.

2.1. The economic sanctions (a fine and the repeal of the validity of the licence) imposed under Article 26 of the Law are measures of repressive nature which give rise to negative proprietary effects and are applied for violations of legal acts, therefore, in the course of their application one should follow the principle non bis in idem.

Under the Law, the question of the repeal of the validity of the licence is considered after a fine has already been imposed for the violation provided for in Items 1, 2, 3 or 4 of Paragraph 3 of Article 14 of the Law. Different institutions apply individual sanctions (a fine and the repeal of the validity of the licence) for violations of the Law, and they apply them at a different time, and the content and character of the applied sanctions themselves are also different. According to its meaning and effects, the limitation on the activity of a legal person is a sanction similar to the sanction applied in penal law—the repeal of the validity of a licence permitting engaging in a certain type of activity, while it is impermissible to impose a fine and limit the activity for the same criminal deed. Thus, the impugned legal regulation established in the Law is in conflict with Paragraph 5 of Article 31 of the Constitution.

2.2. Paragraphs 5 and 17 (wording of 20 November 2003) of Article 26 of the Law establish the legal regulation whereby the validity of the licence is repealed and no new licence is issued for violations of Items 1, 2, 3 or 4 of Paragraph 3 of Article 14 of the Law and the said legal regulation is imperative. In the course of its application the powers of the court are restricted, when account is taken of the character of the violation, the circumstances mitigating the liability as well as of other important circumstances (due to which the corresponding sanction would be too big for the violator, since it would be disproportionate to the committed violation of law and, thus, unfair), and by following the criteria of justice and reasonableness, to impose a smaller measure than that consolidated in these provisions, or not to impose it at all. Thus, Paragraph 1 of Article 109 of the Constitution is violated and the court powers to execute justice are restricted.

2.3. In certain cases, the application of the sanction—the repeal of the validity of the licence—consolidated in Paragraphs 5 and 17 (wording of 20 November 2003) of Article 26 of the Law for violations of Items 1, 2, 3 or 4 of Paragraph 3 of Article 14 of the Law to the violator may be clearly a penalty too big and disproportionate to the committed violation of law, especially after one takes account of the fact that a fine has already been imposed upon the violator for the same violation of law, as well as after one takes account of other important circumstances. Thus, such legal regulation is in conflict with the principles of justice and a state under the rule of law.

2.4. The legal regulation established in Items 39.6 and 40 of the Rules as approved by government resolution No. 383 of 7 April 2004 implements Paragraphs 5 and 17 (wording of 20 November 2003) of Article 26 of the Law and is virtually analogous to the legal regulation established in Paragraphs 5 and 17 (wording of 20 November 2003) of Article 26 of the Law, therefore, according to the opinion of the Vilnius Regional Administrative Court, the petitioner, which is substantiated by the analogous arguments, Items 39.6 and 40 of the Rules are in conflict with Paragraph 1 of Article 109 of the Constitution, and the constitutional principles of justice and a state under the rule of law, while Item 39.6 of the Rules is also in conflict with Paragraph 5 of Article 31 of the Constitution.

III

In the course of the preparation of the case for the Constitutional Court’s hearing, written explanations were received from the representative of the Seimas, a party concerned, who was Seimas member V. Karbauskis and the representatives of the Government, a party concerned, who were N. Pažūsienė and R. Zutkienė (who represented the Government, a party concerned, in the part of the case subsequent to the petition (No. 1B-12/2007) of the Vilnius Regional Administrative Court, the petitioner), wherein it is maintained that the impugned legal regulation is not in conflict with the Constitution.

1. It is maintained in the written explanations of Seimas member V. Karbauskis, the representative of the Seimas, a party concerned, regarding petitions Nos. 1B-75/2006 and 1B-12/2007 of the Vilnius Regional Administrative Court, the petitioner, that the legal regulation consolidated in Paragraphs 5 and 17 of Article 26 of the Law on Tobacco Control is analogous to the provisions of the Law on Alcohol Control, whose compliance with the Constitution was investigated in the Constitutional Court’s ruling of 21 January 2008. On the grounds of the official constitutional doctrine formulated in the said ruling of the Constitutional Court, and on the grounds of the fact that the legal regulation impugned in the constitutional justice case at issue is not designated for regulation of the relations linked with the powers of a court to decide whether a monetary fine must be imposed on an economic subject, while the validity of the licence is not repealed, where due to certain very important circumstances the sanction is clearly disproportionate (inadequate) to the committed violation of law, the member of the Seimas draws the conclusion that Paragraphs 5 and 17 of Article 26 of the Law are not in conflict with the Constitution.

2. The position of N. Pažūsienė and R. Zutkienė, the representatives of the Government, a party concerned, regarding petition No. 1B-12/2007 of the Vilnius Regional Administrative Court, the petitioner, is substantiated by the following arguments.

2.1. Tobacco products not only create, but also sustain dependence. The fact that the number of smoking children and teenagers is increasing is a global problem. Consumption of tobacco products and passive inhalation of tobacco smoke cause diseases, disability and death, they are harmful to public health and the environment, and have negative social and economic effects. By means of the sanctions consolidated in the law one attempts to decrease the consumption of tobacco products and to protect people’s health. Therefore, the activity linked with tobacco growing, production of tobacco products, and wholesale and retail trade thereof is subject to licensing, while sanctions for violations of provisions of the Law on Tobacco Control are strict ones.

When the prohibitions on the marketing, storing or transporting of tobacco products, which are established in Items 1, 2, 3 or 4 of Paragraph 3 of Article 14 of the Law, are violated knowingly, the public interest is violated, therefore, when the validity of the licence of an enterprise is repealed, the principle of justice is not violated. The legal regulation established in Paragraph 17 of Article 26 of the Law ensures that all violators of law who committed the said violations are removed from the market.

While following Paragraph 14 of Article 26 of the Law on Tobacco Control, the fine imposed for the violations established by the Law (including the prohibitions established in Items 1, 2, 3 or 4 of Paragraph 3 of Article 14 thereof) must be differentiated and individualised by taking account of the circumstances mitigating liability and those aggravating liability (Paragraph 15 of Article 26 of the Law), while the court that considers a complaint against decisions of competent institutions to apply an economic sanction has the right to impose a smaller monetary fine.

2.2. Tobacco products are categorised as special products and special state regulation is applied to the activity related with tobacco products, while due to committed violations of the Law on Tobacco Control public interests are damaged, therefore, the monetary fine alone is not a sufficient penalty.

The economic sanctions established in Article 26 of the Law should be likened to penalties for violations of administrative law, the monetary fine should be regarded as the main penalty, while the established the repeal of the validity of the licence—as an additional penalty. The economic sanction—the repeal of the validity of the licence—only supplements the corresponding monetary fine imposed under the provision of the Law on Tobacco Control, and it cannot be applied if the person has not been imposed a monetary fine for the corresponding violation of law. Meanwhile, if the violations specified in Paragraphs 5 and 17 of the Law (or specified accordingly in Item 39.6 and the Third Section of Item 40 of the Rules) were committed, the institution that issued the licence must repeal the validity of the licence.

The fact that, according to the provisions of the Law on Tobacco Control, some institutions are commissioned with issuing the licences, while, under Paragraph 13 of Article 26 of the same law, other institutions are commissioned to impose sanctions for violations of this law, cannot change the essence of the sanctions by categorising them as belonging to the main sanctions and supplementary ones, and this should not be regarded as punishment for the same violation of law twice.

2.3. Taking account of the fact that the legal regulation consolidated in Item 39.6 and the Third Section of Item 40 of the Rules is virtually analogous to the legal regulation established in Paragraphs 5 and 17 of Article 26 of the Law, the conclusion should be drawn that the impugned items of the Rules, insofar as they are in compliance with the provisions of Paragraphs 5 and 17 of Article 26 of the Law, are not in conflict with Paragraph 1 of Article 109 of the Constitution, the constitutional principles of a state under the rule of law and justice, while Item 39.6 of the Rules is not in conflict with Paragraph 5 of Article 31 of the Constitution.

IV

At the Constitutional Court’s hearing, N. Pažūsienė and R. Zutkienė, the representatives of the Government, a party concerned, virtually reiterated the arguments set forth in their written explanations, as well as presented additional explanations.

At the Constitutional Court’s hearing, the specialist—L. Petrauskaitė, Head of the Control-Legal Division of the State Service for Tobacco and Alcohol Control under the Government of the Republic of Lithuania—took the floor and answered to questions.

The Constitutional Court

holds that:

I

1. The Vilnius Regional Administrative Court, the petitioner, requests an investigation (petition No. 1B-75/2006) into whether Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law to the extent that, according to the petitioner, it does not provide for an opportunity not to apply the sanction—the repeal of the validity of the licence—after account is taken of the character of the violation, the circumstances mitigating the liability as well as of other important circumstances, and Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law to the extent that it provides that new licences shall not be issued to the enterprises the validity of whose licences is repealed in accordance with Paragraph 5 of this article, are not in conflict with the constitutional principles of justice and a state under the rule of law.

2. The Vilnius Regional Administrative Court, the petitioner, requests an investigation (petition No. 1B-12/2007) into:

whether Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law, as well as the provisions “The validity of the licences held by enterprises shall be repealed, if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) <…> a corresponding decision of <…> the State Tobacco and Alcohol Control Service regarding the imposition of a <…> penalty for <…> the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof <…> has become effective” and “New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article” of Paragraph 17 of the same article are not in conflict with Paragraph 5 of Article 31, Paragraph 1 of Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law;

whether Item 39.6 of the Rules as approved by Item 1.1 of government resolution No. 383 of 7 April 2004 is not in conflict with Paragraph 5 of Article 31, Paragraph 1 of Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law;

whether the Third Section of Item 40 of the Rules as approved by Item 1.1 of government resolution No. 383 of 7 April 2004 is not in conflict with Paragraph 5 of Article 31, Paragraph 1 of Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law.

3. The petitioner does not indicate in the operative part of the ruling (petition No. 1B-12/2007), by which it applied to the Constitutional Court, the compliance of which wording of Items 39 and 40 (provisions thereof) of the Rules approved by government resolution No. 383 of 7 April 2004 with the Constitution is impugned, however, it is clear from the arguments of the petition that Items 39 and 40 (provisions thereof) (wording of 18 December 2006) of the Rules approved by the said government resolution are impugned.

4. It is clear from the arguments of the petitions (Nos. 1B-75/2006, 1B-12/2007) of the petitioner that the petitioner doubts whether:

Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law is not in conflict with Paragraph 5 of Article 31, Paragraph 1 of Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law (petition No. 1B-12/2007), also whether Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law to the extent that, according to the petitioner, it does not provide for an opportunity not to apply the sanction—the repeal of the validity of the licence—after account is taken of the character of the violation, the circumstances mitigating the liability as well as of other important circumstances, is not in conflict with the constitutional principles of justice and a state under the rule of law (petition No. 1B-75/2006);

the provision “The validity of the licences held by enterprises shall be repealed, if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) <…> a corresponding decision of <…> the State Tobacco and Alcohol Control Service regarding the imposition of a <…> penalty for <…> the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof <…> has become effective. New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article” of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law was not in conflict with Paragraph 5 of Article 31 of the Constitution (petition No. 1B-12/2007), Paragraph 1 of Article 109 of the Constitution (petition No. 1B-12/2007), and the constitutional principles of a state under the rule of law and justice (petitions Nos. 1B-75/2006, 1B-12/2007);

the provision “The validity of the licence shall be repealed if <…> 39.6. the enterprise has violated the conditions of the licensed activity which are established in one of these items—30.2.1., 30.2.2, 30.2.3, or 30.2.4” (wording of 7 April 2004) of Item 39 (wording of 18 December 2006) of the Rules as approved by government resolution No. 383 of 7 April 2004 is not in conflict with Paragraph 5 of Article 31, Paragraph 1 of Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice (petition No. 1B-12/2007);

the provision “The enterprise with regard to which the validity of the licence was repealed due to the reasons specified in one of these items—39.6, 39.7 <…>—shall not be issued a new licence repeatedly” of Item 40 (wording of 18 December 2006) of the Rules as approved by government resolution No. 383 of 7 April 2004 to the extent that it provides that upon the repeal of the validity of the licence a new licence is not issued repeatedly, is not in conflict with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice (petition No. 1B-12/2007).

5. It needs to be noted that, on 26 June 2008, the Seimas adopted the Republic of Lithuania’s Law on Amending and Supplementing Articles 10, 11, 12, 19, and 26 of the Law on Tobacco Control, which came into force on 5 July 2008. By Paragraph 3 of Article 5 of this law Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law on Tobacco Control was recognised as no longer valid.

It also needs to be noted that the Constitutional Court has noted more than once that in the cases when a court considering a case applies to the Constitutional Court after it has had doubts concerning the compliance of a law applicable in the case with the Constitution (or a legal act of higher legal force), the Constitutional Court has the duty to investigate the petition of the court regardless of whether the impugned law or other legal act is valid or not.

II

1. On 20 December 1995, the Seimas adopted the Law on Tobacco Control which came into force (save certain exceptions) on 7 February 1996. This law was designated for regulation of relations linked to tobacco growing, the manufacturing of tobacco products, domestic trade in tobacco products, their keeping, import, tobacco advertising and consumption of tobacco products and establishment of the foundations of state tobacco control in the Republic of Lithuania (Paragraph 2 of Article 2). The Law has been amended and/or supplemented more than once.

2. On 20 November 2003, the Seimas adopted the Republic of Lithuania’s Law on Amending the Law on Tobacco Control and on Recognising the Republic of Lithuania’s Law on Implementing the Law on Tobacco Control as No Longer Valid by Article 1 whereof the Law on Tobacco Control (wording of 20 December 1995 with amendments and supplements made on 20 November 2003) was amended and set forth in its new wording. The Law on Tobacco Control with the new wording came into force (save certain exceptions) on 1 May 2004.

3. Paragraph 5 (wording of 20 November 2003) titled “Economic Sanctions” of Article 26 of the Law, which is impugned by the petitioner in the constitutional justice case at issue, provides: “For infringement of the prohibitions set forth in Items 1, 2, 3 or 4 of Paragraph 3 of Article 14 of this Law, regarding the marketing of tobacco products, storing or transporting thereof if that does not impose criminal liability, legal persons and branches of foreign legal persons shall be subject to a fine from LTL 10,000 to LTL 30,000 and the validity of their licence shall be repealed.”

Items 1, 2, 3 or 4 (wording of 20 November 2003) of Article 14 of the Law, inter alia, provide:

3. It shall be prohibited in the Republic of Lithuania, for legal persons and branches of foreign state legal persons to sell, store, transport tobacco products and also to import tobacco products into the Republic of Lithuania:

1) without legally valid documents certifying acquisition and transportation. Legally valid documents certifying the acquisition or transportation must be kept in all tobacco product sales outlets and/or places of storing. It is mandatory to hold transportation documents or validly legal documents certifying the acquisition of tobacco products, while transporting tobacco products;

2) if the products are fake;

3) if the products are contraband;

4) without special marks—tax stamps—according to the special sample, established by the institution authorised by the Government <…>, except in cases when based upon the Republic of Lithuania’s Law on Excise Tax and other legal acts the tobacco products special marks—tax stamps—are not mandatory.”

4. Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law, the compliance of the provisions of which with the Constitution are impugned in the constitutional justice case at issue used to provide:

17. The validity of the licences held by enterprises shall be repealed, if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) a court judgment of conviction, a court ruling, decision has become effective, a corresponding decision of the customs department, tax inspectorate, police, or the State Tobacco and Alcohol Control Service regarding the imposition of a punishment or penalty for the contraband of tobacco or tobacco products, the marketing, storing or transporting of falsified tobacco products, the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof and, also, for the unlawful storing, transporting or marketing of tobacco products without the special marks—tax stamps—has become effective. New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article.”

5. The Law on Tobacco Control (wording of 20 November 2003) was amended and/or supplemented by the Republic of Lithuania’s Law on Amending Articles 2, 1, 5, 6, 8, 14, 17, 18, and 26 of the Law on Tobacco Control, which was adopted by the Seimas on 15 November 2005 and which came into force on 3 December 2005, by the Republic of Lithuania’s Law on Amending and Supplementing Articles 19 and 26 of the Law on Tobacco Control, which was adopted on 11 May 2006 and which came into force on 1 January 2007, the Republic of Lithuania’s Law on Amending Articles 2, 4, 14, 25, and 26 of the Law on Tobacco Control, which was adopted on 15 June 2006 and which came in force on 30 June 2006, however, Paragraphs 5 and 17 (wording of 20 November 2003) of Article 26 of the Law were not amended and/or supplemented by the said amendments to the Law.

6. The legal regulation consolidated in Paragraph 5 (wording of 20 November 2003) of Article 26 and the provision of Paragraph 17 (wording of 20 November 2003) of the Law, which are impugned by the petitioner, should be construed, inter alia, in the context of other provisions of this Law (wordings of 20 November 2003, 15 November 2005, 11 May 2006, and 15 June 2006).

Under the Law, tobacco products shall be categorised as special products, for whose manufacture, marketing, introduction, import, advertising and other related types of activities and consumption, extraordinary state and legal regulation shall apply in accordance with this and other laws and legal acts (Paragraph 3 (wording of 20 November 2003) of Article 1); it shall be permitted to engage in tobacco growing, manufacture of tobacco products, wholesale and retail marketing in the Republic of Lithuania, only by having licences, which have been issued according to the established procedure (Paragraph 1 (wording of 20 November 2003) of Article 10); the Law indicates the institutions which are empowered to impose monetary fines for violations of provisions of the Law; in this context, it needs to be noted that the State Tobacco and Alcohol Control Service is also empowered to impose fines, inter alia, for violations of Items 1, 2, 3, 4 and 6 (Paragraph 2 (wordings of 20 November 2003 and 11 May 2006) of Article 26) of Article 14 of the Law; for violations of the requirements and/or prohibitions specified, inter alia, in Paragraph 1 (wording of 20 November 2003), Paragraph 2 (wording of 20 November 2003), Paragraph 3 (wording of 15 June 2006), Paragraph 4 (wording of 20 November 2003), Paragraph 6 (wording of 15 June 2006), Paragraph 7 (wording of 15 June 2006), Paragraph 8 (wording of 15 June 2006), Paragraph 9 (wording of 20 November 2003), Paragraph 10 (wording of 20 November 2003), Paragraph 11 (wording of 15 June 2006), Paragraph 12 (wording of 11 May 2006) of Article 26 of the Law, persons are punished by monetary fines (which are subject to differentiation); for violations of the requirements specified in Paragraph 7 (wording of 15 June 2006) of Article 26 of the Law, persons are (were) imposed a monetary fine and the validity of the licence is repealed with respect to the sales outlet wherein the violation has been identified and a new licence is not issued within a certain time period established in the Law (Paragraph 7 (wording of 15 June 2006) and Paragraph 16 (wording of 15 June 2006) of Article 26); for violations of the prohibitions specified in Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law, a monetary fine is (was) imposed, the validity of the licence is (was) repealed and no new licence is (was) issued (Paragraph 5 (wording of 20 November 2003) and Paragraph 17 (wording of 20 November 2003) of Article 26).

It was established in Article 11 (wording of 20 November 2003) of the Law that licences to engage in the activities indicated in Paragraph 1 of Article 10 shall not be issued to the enterprises, whose founders or administration chiefs (if they had acted on behalf of the enterprise or for its interests), had been the founders, administration chiefs or other personnel members of the enterprises, whose licence validity has been repealed in accordance with Paragraph 5 of Article 26 of this Law; licences to engage in tobacco growing, the manufacture of tobacco products and the wholesale marketing of tobacco products, shall be issued by the State Tobacco and Alcohol Control Service in pursuance with the licensing rules approved by the Government (Paragraph 3); licences to engage in the retail marketing of tobacco products shall be issued by the executive institution of the local government, on the territory whereof the enterprise shall engage in the retail marketing of tobacco products (Paragraph 4).

It was established in Article 18 (wording of 20 November 2003) of the Law that the validity of a licence shall be repealed by institutions, which within the scope of their competence shall issue licences to engage in the manufacturing of tobacco products and the wholesale or retail marketing of tobacco products.

Article 33 titled “Lodging Complaints Against Decisions on Imposition of Economic Sanctions” (wording of 20 November 2003) of the Law provides that persons, who do not agree with the decision on imposition of economic sanctions, shall have the right to lodge a complaint against it in court within one month from the day of the handing down of the decision in accordance with the procedure set forth by the Republic of Lithuania’s Law on Proceedings of Administrative Cases (Paragraph 1); an application to a court shall suspend the execution of the decision to impose economic sanctions (Paragraph 2).

7. Summing up the legal regulation entrenched in the Law (wording of 20 November 2003 with subsequent amendments and supplements made until the entry into force of the Law on Amending and Supplementing Articles 10, 11, 12, 19, and 26 of the Law on Tobacco Control on 26 June 2008), in the context of the constitutional justice case at issue it needs to be held that:

tobacco products are categorised as special products and a special state legal regulation is applied to trade in such products, and to other types of activity related to them and their consumption;

the wholesale and retail trade in tobacco products is an activity subject to licensing, i.e. an activity to engage in which a person is allowed only when he has the corresponding permit—a licence;

various so-called economic sanctions are established for violations of requirements and/or prohibitions established in the Law: for some violations of law, the persons who committed them and who are specified in the law are imposed only a monetary fine (which is subject to differentiation), for other violations a monetary fine is imposed and the validity of the licence is repealed with respect to the sales outlet wherein the violation has been identified and a new licence is not issued within a certain time period established in the Law, and for some other violations of the requirements and/or prohibitions established in the Law the validity of the licence is repealed and no new licence is issued;

under the Law, in the case where a person committed a corresponding violation of a requirement and/or prohibition established in the Law (inter alia, the one established in Paragraphs 5 and 17 (wording of 20 November 2003) of Article 26 of the Law) for which a monetary fine must be (had to be) imposed and the validity of the licence must be (had to be) repealed, the institution empowered to impose the monetary fine may not (was not allowed to) decide not to impose the monetary fine provided for in the Law for commission of such violation of law, while, upon the imposition of the fine and upon the entry into effect of the decision on imposing the fine, the institution authorised to repeal the validity of the licence, may not (was not allowed to) decide not to repeal the validity of the licence;

as a rule, for violations of the requirements and/or prohibitions specified in the Law, in the cases provided for in the Law, different institution have (had) the powers to apply the so-called economic sanctions (to impose a monetary fine and repeal the validity of the licence): some institutions have (had) the right to impose monetary fines, while other institutions have (had) the right to repeal the validity of the licence;

the persons who disagree with a decision (decisions) of the institutions (empowered to apply the so-call economic sanctions established in the Law, i.e., to impose monetary fines, to repeal the validity of the licence) specified in the Law to apply an economic sanction (economic sanctions), have (had) the right to lodge a complaint against such a decision in a court;

the Law did not provide for the powers of the court to repeal the decision (if a person’s complaint has been lodged against such decision adopted by an institution established in the Law regarding the repeal of validity of the licence) if the decision on imposition of a fine for corresponding violations of the Law had come in effect.

8. By Article 2 of the Law on Amending and Supplementing Articles 10, 11, 12, 19, and 26 of the Law on Tobacco Control, which was adopted by the Seimas on 26 June 2008, Article 11 (wording of 15 June 2006) of the Law on Tobacco Control was amended and set forth in its new wording, while by Paragraph 3 of Article 5 of the same law Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law on Tobacco Control was recognised as no longer valid.

Items 5 and 6 of Paragraph 6 and Items 3 and 4 of Paragraph 8 of Article 11 titled “Issuance of Licences, Refusal to Issue the Licence, Suspension of the Validity of the Licence, The repeal of the Validity of the Licence” (wording of 26 June 2008) of the Law provide:

6. Licences to engage in the activity the types of which are specified in Paragraph 1 of Article 10 of this Law shall not be issued, if: <…>

5) with regard of the enterprise, or heads thereof a court judgment of conviction, a court ruling, decision has become effective, a corresponding decision of the customs department, the State Tax Inspectorate, police, or the State Tobacco and Alcohol Control Service under the Government of the Republic of Lithuania regarding the imposition of a punishment or penalty for the contraband of tobacco or tobacco products, the marketing, storing or transporting of falsified tobacco products, the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof and, also, for the unlawful storing, transporting or marketing of tobacco products without the special marks—tax stamps—has become effective (licences shall not be issued at all);

6) founders or heads of the enterprises are (were) founders, heads or other employees of the enterprises in whose regard the validity of the licence was repealed <…> on the grounds established in Paragraph 5 of Article 26 of this Law, provided they have acted on behalf of the enterprise, or for the interests thereof (licences shall not be issued at all); <…>

8. The validity of the licence shall be repealed: <…>

3) if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) a court judgment of conviction, a court ruling, decision has become effective, a corresponding decision of the customs department, the State Tax Inspectorate, police, or the State Tobacco and Alcohol Control Service under the Government of the Republic of Lithuania regarding the imposition of a punishment or penalty for the contraband of tobacco or tobacco products, the marketing, storing or transporting of falsified tobacco products, the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof and, also, for the unlawful storing, transporting or marketing of tobacco products without the special marks—tax stamps—has become effective;

4) on the grounds established in Paragraphs <…> 5 of Article 26 of the Law; <…>”.

In this context it needs to be noted that Items 5 and 6 of Paragraph 6 and Items 3 and 4 of Paragraph 8 of Article 11 (wording of 26 June 2008) of the Law is virtually analogous to that established in Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law, whose provision is impugned in this constitutional justice case by the petitioner.

III

On the compliance of Paragraphs 5 and 17 (wording of 20 November 2003) of Article 26 of the Law on Tobacco Control with Paragraph 5 of Article 31 and Paragraph 1 of Article 109 of the Constitution as well as the constitutional principles of a state under the rule of law and justice.

1. The doubts of the Vilnius Regional Administrative Court, the petitioner, regarding the compliance of Paragraph 5 (wording of 20 November 2003) and the impugned provision of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law with Paragraph 5 (wherein it is provided “No one may be punished for the same crime a second time”) of Article 31 of the Constitution are substantiated by the fact that, in its opinion, when not only a monetary fine, but also the repeal of the validity of a licence and the non-issuance of a new licence were established for corresponding violations of law, and after all this was named as “economic sanctions” in the Law, the constitutional principle non bis in idem is (was) violated (petition No. 1B-12/2007).

2. As mentioned before, tobacco products are categorised as special products and a special state legal regulation is applied to trade in such products, and to other types of activity related to them and their consumption. The repeal of the validity of a licence and the non-issuance of a new licence has (had) to be applied upon establishing that the person had committed a corresponding violation of law—failed to follow the imperative requirements of law—and the said violator of law, a person, was punished by a monetary fine (from which he cannot (could not) be exonerated). As mentioned before, as a rule, for violations of the requirements and/or prohibitions specified in the Law, in the cases provided for in the Law, different institution have (had) the powers to apply the so-called economic sanctions (to impose a monetary fine and repeal the validity of the licence): some institutions have (had) the right to impose monetary fines, while other institutions have (had) the right to repeal the validity of the licence.

3. In this context, it needs to be noted that the Constitutional Court has considered a constitutional justice case and, on 21 January 2008, it adopted the Ruling “On the Compliance of Paragraph 8 (wording of 9 March 2004) of Article 18, Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 and Article 41 (wording of 9 March 2004) of the Republic of Lithuania’s Law on Alcohol Control with the Constitution of the Republic of Lithuania, on the Compliance of Items 28.5 and 51.5 (wording of 20 May 2004) and Item 51 (wording of 20 May 2004) of the Rules of Licensing the Wholesale and Retail Trade in Alcoholic Products as Approved by the Resolution of the Government of the Republic of Lithuania (No. 618) ‘On Approving the Rules of Licensing the Wholesale and Retail Trade in Alcoholic Products and the Rules of the Retail Trade in Alcoholic Beverages at the Enterprises of Trade and Public Catering’ of 20 May 2004 with the Constitution of the Republic of Lithuania, Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 of the Republic of Lithuania’s Law on Alcohol Control, on the Compliance of Item 51 (wording of 17 October 2006) of These Rules with the Constitution of the Republic of Lithuania and Paragraph 17 (wording of 25 April 2006) of Article 34 of the Republic of Lithuania’s Law on Alcohol Control, as well as on the Compliance of Item 51 (wording of 2 May 2007) of These Rules with the Constitution of the Republic of Lithuania and Paragraph 17 (wordings of 25 April 2006 and 21 June 2007) of Article 34 of the Republic of Lithuania’s Law on Alcohol Control”.

In the said constitutional justice case, the Constitutional Court was requested, inter alia, to investigate whether Paragraph 17 (wording of 9 March 2004) of Article 34 of the Law on Alcohol Control was not in conflict with Paragraph 5 of Article 31 of the Constitution; the doubts of the Supreme Administrative Court of Lithuania, the petitioner, regarding the compliance of Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 of the Law on Alcohol Control with the Constitution were grounded on the fact that, in its opinion, when not only a monetary fine, but also the repeal of the validity of a licence and the non-issuance of a new licence were established for corresponding violations of law, and after all this was named as “economic sanctions” in the Law on Alcohol Control, inter alia, the constitutional principle non bis in idem is violated.

It is clear from what has been set forth that in the constitutional justice case at issue the compliance of the legal regulation entrenched in the provisions of the Law on Tobacco Control which are impugned by the Vilnius Regional Administrative Court, the petitioner, and in the aforementioned constitutional justice case, wherein the Constitutional Court’s ruling of 21 January 2008 was adopted, the compliance of the legal regulation in the impugned provision of the Law on Alcohol Control with Paragraph 5 of Article 31 of the Constitution is virtually impugned in the same aspect, i.e. the repeal of the validity of the licence and the non-issuance of a new licence had to be applied in all cases, when an economic subject was imposed a monetary fine for a corresponding violation of law.

4. In its ruling of 21 January 2008, the Constitutional Court held that the Law on Alcohol Control had enshrined such overall legal regulation, under which, the discussed prohibition sanction—the repeal of the validity of the licence and the non-issuance of a new licence—was such a sanction, which is inseparable from another sanction—the fine—which is imposed upon the same violator of law—the economic subject for the corresponding (the same) violation of law. First of all, one had to establish the fact of the corresponding violation of law and that this violation of law was committed by the economic subject which is brought to legal liability and that for the said violation of law the violator of law—the economic subject—had to be imposed a fine.

In this context it needs to be noted that the legal regulation entrenched in the Law on Alcohol Control, which was impugned in the aforesaid constitutional justice case, and the legal regulation entrenched in the Law on Tobacco Control, which is impugned in the constitutional justice case at tissue, in the aspect of the application of the so-called economic sanctions (a monetary fine and the repeal of the validity of a licence) were virtually analogous.

In its ruling of 21 January 2008, the Constitutional Court held that:

the content and purpose of the “economic sanctions”—the fine and the repeal of the validity of the licence and the non-issuance of a new licence—established in of the Law on Alcohol Control and some other laws are different;

the fine is a sanction of repressive nature, whereby the violator of law—an economic subject—is punished and whereby direct negative impact to the property and economic situation of that economic subject, thus, also to the ownership right and freedom of economic activity is made because its monetary funds are alienated; on the other hand, such violator of law, after it has paid the fine, may continue engaging in the corresponding activity without feeling any additional limitations, as well as implement its other rights;

the repeal of the validity of the licence and the non-issuance of a new licence (as deprivation of a special right) is such a sanction whose negative impact to the property and economic situation of the economic subject is made not directly, i.e. not by alienating (as in case of the fine) its monetary funds, but by not permitting it to engage in the corresponding activity (for a certain time); such sanctions are called prohibition sanctions;

the purpose of the repeal of the validity of the licence and the non-issuance of a new licence as a prohibition sanction is not only—and not as much as—to punish the violator of law, but, first of all, to carry out prevention: a subject of law, which used the licence and violated the conditions with which the use of that licence is linked, is removed from the corresponding market so that it would no longer make harm for the values which are defended and protected by law; and it is removed from the market because of the fact that at that time when it was still the participant of that market, it violated the essential conditions of being in that market (the conditions which, doubtless to say, were known and understood by that subject): it did not comply with the imperative requirements of law;

the repeal of the validity of the licence and the non-issuance of a new licence is an indivisible sanction in the aspect that any “partial”, i.e. non-absolute, incomplete the repeal of the validity of the licence is in general impossible: the validity of the licence may be either repealed (if there is the ground established in the Law), or it may not be repealed (if there is no such ground);

the repeal of the validity of the licence is not an end in itself, it is the condition and precondition of the non-issuing of a new licence; the non-issuing of a new licence extends and supplements, essentially gives sense to the action of the repeal of the validity of the licence, as the repeal of the validity of the licence itself would hardly have any clearly definable sense if the violator of law—the economic subject—whose licence was repealed for non-compliance with the imperative requirements of law could immediately get the same licence anew;

taking account of the nature of the violations of law for which the corresponding sanctions are established, as well as of the socially significant objectives which are sought by means of such legal regulation, it is possible to establish by law that for a certain violation of law, any of the following may be imposed: the monetary fine, the repeal of the validity of the licence and the non-issuing of a new licence;

the constitutional principle non bis in idem does not prohibit applying the prohibition sanction—a preventive measure—together with another administrative penalty to a person;

in itself the constitutional principle non bis in idem does not deny a possibility of imposing more than one sanction upon the person for the same violation of law; it is possible to answer whether the corresponding legal regulation does not violate the said constitutional principle only upon assessing the nature of the violations of law for which the corresponding sanctions are established, as well as the socially significant objectives which are sought by the legislature; the fact whether a certain administrative penalty (or punishment) established by law is classed as belonging either to the main or additional categories, or whether it is not classed as belonging to any of these categories, is of no significance in the aspect of the compliance of the corresponding legal regulation with the constitutional principle non bis in idem, because the division of administrative penalties (as well as punishments) into main and additional ones stems not from the Constitution, but from the law, i.e. from ordinary law;

the constitutional principle non bis in idem means the prohibition on punishment a second time for the same deed that is contrary to law, i.e. for the same crime, as well as for the same violation of law which is not a crime; however, this constitutional principle does not mean that different kinds of liability may not be applied to the person for a violation of law; in addition, in itself, the constitutional principle non bis in idem does not deny a possibility of applying more than one sanction of the same kind (i.e. defined by the norms of the same branch of law) to a person for the same violation, i.e. the main and additional punishment or the main and additional administrative penalty.

5. In its ruling of 21 January 2008, the Constitutional Court recognised, inter alia, that Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 of the Law on Alcohol Control was not in conflict with the Constitution.

6. As mentioned before, in the constitutional justice case at issue the compliance of the legal regulation entrenched in Paragraph 5 and in the impugned provision of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law on Tobacco Control and in the aforementioned constitutional justice case, wherein the Constitutional Court’s ruling of 21 January 2008 was adopted, the compliance of the legal regulation entrenched in Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 of the Law on Alcohol Control with Paragraph 5 of Article 31 of the Constitution is virtually impugned in the same aspect of the legal regulation established in the said laws, i.e. the repeal of the validity of the licence and the non-issuance of a new licence had to be applied in all cases, when an economic subject was imposed a monetary fine for a corresponding violation of law.

Taking account of this, it should be held that the provisions of the constitutional doctrine formulated in the Constitutional Court’s ruling of 21 January 2008 which was adopted in the aforesaid constitutional justice case regarding the compliance of the legal regulation entrenched in Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 of the Law on Alcohol Control with Paragraph 5 of Article 31 of the Constitution in the aspect that the prohibition sanction—the repeal of the validity of the licence and the non-issuance of a new licence—had to be applied in all cases when a monetary fine was imposed upon an economic subject for a corresponding violation of law, should also be applied mutatis mutandis while deciding whether Paragraph 5 (wording of 20 November 2003) and the impugned provision of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law is (was) not in conflict with Paragraph 5 of Article 31 of the Constitution.

7. Taking account of the arguments set forth, it should be held that:

Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law is not in conflict with Paragraph 5 of Article 31 of the Constitution;

the provision “The validity of the licences held by enterprises shall be repealed, if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) <…> a corresponding decision of <…> the State Tobacco and Alcohol Control Service regarding the imposition of a <…> penalty for <…> the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof <…> has become effective. New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article” of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law was not in conflict with Paragraph 5 of Article 31 of the Constitution.

8. It has been mentioned that the Vilnius Regional Administrative Court, the petitioner, also doubts whether Paragraph 5 (wording of 20 November 2003) the Law is not in conflict with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law (petition No. 1B-12/2007), whether Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law on to the extent that, according to the petitioner, it does not provide for an opportunity not to apply the sanction—the repeal of the validity of the licence—after account is taken of the character of the violation, the circumstances mitigating the liability as well as of other important circumstances, is not in conflict with the constitutional principles of justice and a state under the rule of law (petition No. 1B-75/2006), as well as whether the provision “The validity of the licences held by enterprises shall be repealed, if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) <…> a corresponding decision of <…> the State Tobacco and Alcohol Control Service regarding the imposition of a <…> penalty for <…> the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof <…> has become effective. New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article” of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law was not in conflict with Paragraph 1 of Article 109 of the Constitution (petition No. 1B-12/2007) and the constitutional principles of justice and a state under the rule of law (petitions Nos. 1B-75/2006 and 1B-12/2007).

In the opinion of the Vilnius Regional Administrative Court, the petitioner, Paragraph 5 (wording of 20 November 2003) and the impugned provision of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law are (were) in conflict with Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law, inter alia, due to the fact that, after not only a monetary fine, but also the repeal of the validity of a licence and the non-issuance of the licence is established, the powers of a court are restricted, when account is taken of the character of the violation, the circumstances mitigating the liability as well as of other important circumstances (due to which the corresponding sanction would be too big for the violator, since it would be disproportionate to the committed violation of law and, thus, unfair), and by following the criteria of justice and reasonableness, not to impose the sanction—the repeal of the validity of a licence—therefore, the powers of a court to administer justice are restricted.

9. In the constitutional justice case wherein the Constitutional Court adopted the ruling of 21 January 2008, it was requested to investigate, inter alia, the compliance of Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 of the Law on Alcohol Control with Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law, inter alia, due to the fact that, after not only a monetary fine, but also the repeal of the validity of a licence and the non-issuance of the licence is established, the powers of a court are restricted, when account is taken of the character of the violation, the circumstances mitigating the liability as well as of other important circumstances (due to which the corresponding sanction would be too big for the violator, since it would be disproportionate to the committed violation of law and, thus, unfair), and by following the criteria of justice and reasonableness, not to impose the sanction—the repeal of the validity of a licence—therefore, the powers of a court to administer justice are restricted.

It is clear from what has been set forth that in the constitutional justice case at issue the compliance of the legal regulation entrenched in the impugned provisions of the Law on Tobacco Control and in the aforementioned constitutional justice case the compliance of the legal regulation in the impugned provision of Article 34 of the Law on Alcohol Control with Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law is virtually impugned in the same aspect, i.e. that, after not only a monetary fine, but also the repeal of the validity of a licence and the non-issuance of the licence is established, the powers of a court are restricted, when account is taken of the character of the violation, the circumstances mitigating the liability as well as of other important circumstances (due to which the corresponding sanction would be too big for the violator, since it would be disproportionate to the committed violation of law and, thus, unfair), and by following the criteria of justice and reasonableness, not to impose the sanction—the repeal of the validity of a licence—therefore, the powers of a court to administer justice are restricted.

10. In its ruling of 21 January 2008, the Constitutional Court held that Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 of the Law on Alcohol Control established as for which violations of this law the prohibition sanction—the repeal of the validity of a licence and the non-issuance of a new licence (within the established time)—is imposed upon the enterprises which hold licences to engage in wholesale and retail trade in alcoholic beverages, but which do not follow the requirements of this law. Under the Law on Alcohol Control, the institutions which enjoyed the powers to issue corresponding licences, had to adopt a decision of the repeal of the validity of a licence: if a violation of law specified in Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 of the Law on Alcohol Control had been made, a corresponding institution had to repeal the validity of the licence. While investigating the compliance of this provision with Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law, the Constitutional Court also assessed the compliance of Article 41 of the Law on Alcohol Control (wording of 9 March 2004) with the Constitution, since precisely the said article was designed for the regulation of the relations linked with lodging complaints against the so-called economic sanctions established in the Law on Alcohol Control with a court. In its ruling of 21 January 2008, the Constitutional Court held that the provisions of Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 and those of Article 41 (wording of 9 March 2004) of the Law on Alcohol Control are related, since Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 of the Law establishes “economic sanctions” (in the considered case—the repeal of the validity of the licence and the non-issuance of a new licence (for the established time)), and Article 41 (wording of 9 March 2004) is designed for the regulation of lodging complaints against these sanctions with a court.

In this context it needs to be noted that in Paragraph 5 and the impugned provision of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law is (was) established as for which violations of this law the prohibition sanction—the repeal of the validity of a licence and the non-issuance of a new licence (within the established time)—is imposed upon the enterprises which hold licences to engage in the corresponding activity related with tobacco and tobacco products and which do not follow the requirements of this law. Under the Law on Tobacco Control, the institutions which enjoyed the powers to issue corresponding licences, had to adopt a decision of the repeal of the validity of a licence: if one or several violations of law specified in Paragraph 5 and the impugned provision of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law had been made, a corresponding institution has (had) to repeal the validity of the licence. Article 33 titled “Lodging Complaints Against Decisions on Imposition of Economic Sanctions” (wording of 20 November 2003) of the Law on Tobacco Control was designed for the regulation of the relations linked with lodging complaints against the so-called economic sanctions (a monetary fine and the repeal of the validity of a licence) established in the Law on Tobacco Control with a court. Taking account of this, it should be held that Paragraph 5, the impugned provision of Paragraph 17 (wording of 20 November 2003) of Article 26 and the provision of Article 33 (wording of 20 November 2003) of the Law on Tobacco Control are (were) related: Paragraph 5 and the impugned provision of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law on Tobacco Control establishes (established) the so-called economic sanctions for violations of the Law, while Article 33 (wording of 20 November 2003) thereof is designed for the regulation of lodging complaints against these sanctions with a court.

It also needs to be noted that the discussed legal regulation which is entrenched in the Law on Alcohol Control and which was impugned in the constitutional justice case wherein the Constitutional Court’s ruling of 21 January 2008 was adopted, and the legal regulation entrenched in the Law on Tobacco Control, differ from each other in certain aspects, inter alia:

1) Article 41 (wording of 9 March 2004) of the Law on Alcohol Control generally did not contain the right of economic subjects to lodge a complaint against a decision on the repeal of the validity of a licence for violations specified in Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 of this law, while the right of enterprises is entrenched in Article 33 (wording of 20 November 2003) of the Law on Tobacco Control to lodge complaints against decisions on applying economic sanctions, inter alia, against the repeal of the validity of a licence for violations of law specified in Paragraphs 5 and 17 (wording of 20 November 2003) of Article 26 of the Law on Tobacco Control;

2) Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 of the Law on Alcohol Control established the legal regulation whereby the validity of a licence had to be repealed and a new licence could not be issued, within the time period precisely defined in the law, to the violator of law—the person who committed one or several violations of law specified in the impugned provisions of the Law on Alcohol Control, while in the impugned provision of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law on Tobacco Control such overall legal regulation was established, whereby with regard to the violator of law, a person, who committed one or several violations of law specified in the Law, the validity of a licence had to be repealed and it was prohibited to issue new licences to him. In this context, it needs to be noted that the aspect of the legal regulation that new licences shall not be issued upon the repeal of the validity of the licences was consolidated in the provision “New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article” of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law on Tobacco Control, therefore, the compliance of the cited provision of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law on Tobacco Control with Paragraph 1 of Article 109 of the Constitution will be investigated in this constitutional justice case separately.

11. It has been mentioned that the sanction—the repeal of the validity of a licence—is established in Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law for violations of the Law; the impugned provision of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law established not only the sanction—the repeal of the validity of the licence in cases provided for in this paragraph—but also in what cases new licences are not issued upon the repeal of the validity of the licence.

Taking account of this, first of all, it must be decided on whether Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law to the impugned extent is not in conflict with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice, and whether the provision “The validity of the licences held by enterprises shall be repealed, if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) <…> a corresponding decision of <…> the State Tobacco and Alcohol Control Service regarding the imposition of a <…> penalty for <…> the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof <…> has become effective” of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law was not in conflict with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice.

12. In its ruling of 21 January 2008, the Constitutional Court held that:

courts, when they administer justice, must ensure the implementation of law expressed in the Constitution, laws and other legal acts, they must guarantee the supremacy of law, protect human rights and freedoms; a duty to courts stems from Paragraph 1 of Article 109 of the Constitution to consider cases justly and objectively and to adopt reasoned and reasonable decisions; the principle of justice entrenched in the Constitution as well as the provision that justice is administered solely by courts mean that the constitutional value is not the adoption of a decision in court, but rather the adoption of a just court decision; the constitutional concept of justice implies not only a formal and nominal justice administered by the court, not only an outward appearance of justice administered by the court, but, most importantly, such court decisions (other court final acts), which by their content are not unfair; the justice administered only formally by the court is not the justice which is consolidated in and protected and defended by the Constitution;

the constitutional principles of justice and a state under the rule of law also imply that the measures established by the state for the violations of law must be proportionate (adequate) to the violation of law and must comply with the lawful and socially significant objectives sought and do not have to restrain a person more than it is necessary in order to reach these objectives; there must be a fair balance (proportionality) between the objective sought to punish the violators of law and to ensure the prevention of the violations of law and the measures chosen for reaching this objective; the constitutional principle of justice requires to differentiate the established penalties so that while applying them, one could take account of the nature of the violation of law, of the circumstances mitigating the liability and other circumstances, that, while taking account of this, one could impose a smaller penalty than the minimal one provided for in the sanction, etc.; the monetary fines established in the laws for violations of law must be of such size which is necessary while seeking the legitimate and socially significant objective—to ensure the observance of laws and carrying out of the established duties;

the penalties in their system which are established in laws must be such so that a court, when it imposes the penalties, would be able to administer justice;

the provision of the official constitutional doctrine quoted in this ruling of the Constitutional Court that in itself (without an assessment of the character, danger (gravity), the scale and other features of a certain violation of law) the consolidation of strict (for violators of law) sanctions for violations of law cannot be construed as unfair or inadequate to the respective violation of law should be applied not only to big monetary fines, but also to other sanctions, as well as to the so-called prohibition sanctions;

the powers (which arise from the Constitution) of the court to decide whether the corresponding violator of law—an economic subject—has to be applied a monetary fine, but not the repeal of the validity of the licence, do not at all mean that the court may disregard the principled provision that the said person, at the time when he was a participant of the market of trade (for which the particular state regulation regime is applied) in alcoholic products, violated the essential conditions of being in that market (the conditions which, doubtless to say, were known and understood by that participant)—it did not comply with the imperative requirements of law, and the principled provision that this market must be protected from such participants of the market which, being in that market, acted not according to its rules, but in breach of the rules. Thus, such cases, when the said prohibition sanction does not have to be applied, may only be very rare and exceptional ones; it is obvious that in every such case, in the corresponding court act one must clearly and rationally argue what values, which are enshrined in, and protected and defended by the Constitution, would be violated by the repeal of the validity of the licence.

13. In its ruling of 21 January 2008, the Constitutional Court recognised, inter alia, that Article 41 (wording of 9 March 2004) the Law on Alcohol Control, to the extent that it does not provide for the possibility for a court, taking account of the nature of the violation of law, its extent, the circumstances mitigating the liability and other significant circumstances and following the principles of justice and reasonableness, to decide that this sanction—the repeal of the validity of the licence—does not have to be applied to the enterprise for the violations of law established in Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 of this law, because due to certain very important circumstances it is obviously disproportionate (inadequate) to the committed violation of law, thus, unfair, was in conflict with Paragraph 1 of Article 109 of the Constitution, and with the constitutional principles of justice and a state under the rule of law.

In the same ruling the Constitutional Court recognised that Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of the Law on Alcohol Control was not in conflict with Paragraph 1 of Article 109 of the Constitution, and with the constitutional principles of justice and a state under the rule of law.

14. While deciding whether Paragraph 5 (wording of 20 November 2003) of Article 26 and the impugned provision “The validity of the licences held by enterprises shall be repealed, if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) <…> a corresponding decision of <…> the State Tobacco and Alcohol Control Service regarding the imposition of a <…> penalty for <…> the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof <…> has become effective” of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law on Tobacco Control is (was) not in conflict with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice, it needs to be noted that, as mentioned before, the compliance of the legal regulation entrenched in these impugned provisions of the Law on Tobacco Control and the compliance of the legal regulation of the Law on Alcohol Control impugned in the aforementioned constitutional justice case, wherein the Constitutional Court’s ruling of 21 January 2008 was adopted, with Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice, is virtually impugned in the same aspect.

Taking account of this, it should be held that the provisions of the constitutional doctrine, formulated in the Constitutional Court’s ruling of 21 January 2008, regarding the compliance of the legal regulation entrenched in Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) and Article 41 (wording of 9 March 2004) of Article 34 of the Law on Alcohol Control with Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice, to the extent that it does not provide for the possibility for a court, taking account of the nature of the violation of law, its extent, the circumstances mitigating the liability and other significant circumstances and following the principles of justice and reasonableness, to decide that this sanction—the repeal of the validity of the licence—does not have to be applied to the enterprise for the violations of law established in Paragraph 17 (wordings of 9 March 2004 and 25 April 2006) of Article 34 of this law, because due to certain very important circumstances it is obviously disproportionate (inadequate) to the committed violation of law, thus, unfair, should also be applied mutatis mutandis while deciding whether Paragraph 1 of Article 33 (wording of 20 November 2003) of the Law, to the extent that it does not provide for the possibility for a court, taking account of the nature of the violation of law, its extent, the circumstances mitigating the liability and other significant circumstances and following the principles of justice and reasonableness, to decide that this sanction—the repeal of the validity of the licence—does not have to be applied to persons, because due to certain very important circumstances it is obviously disproportionate (inadequate) to the committed violation of law, thus, unfair, is not in conflict with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice.

15. Taking account of the arguments set forth, the conclusion should be drawn that:

Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law is not in conflict with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice;

the provision “The validity of the licences held by enterprises shall be repealed, if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) <…> a corresponding decision of <…> the State Tobacco and Alcohol Control Service regarding the imposition of a <…> penalty for <…> the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof <…> has become effective” of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law was not in conflict with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice;

Paragraph 1 (wording of 20 November 2003) of Article 33 of the Law to the extent that it does not provide for the possibility for a court, taking account of the nature of the violation of law, its extent, the circumstances mitigating the liability and other significant circumstances and following the principles of justice and reasonableness, to decide that this sanction—the repeal of the validity of the licence—does not have to be applied to persons, because due to certain very important circumstances it is obviously disproportionate (inadequate) to the committed violation of law, thus, unfair, is in conflict with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice.

16. While deciding whether the impugned provision “New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article” of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law was not in conflict with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice, it needs to be noted that the Law provides for the requirements which must be followed by the persons who hold licences to engage in the activity linked with tobacco and its products. The so-called economic sanctions entrenched in Article 26 titled “Economic Sanctions” (wording of 20 November 2003 with subsequent amendments and supplements) of the Law are applied to those persons who do not follow the requirements established in the Law. It has been mentioned that for some violations specified in the Law, the persons who committed them and who are specified in the Law are imposed only a monetary fine (which is subject to differentiation), for other violations a monetary fine is imposed and the validity of the licence is repealed with respect to the sales outlet wherein the violation has been identified and a new licence is not issued within a certain time period established in the Law, and for some other violations of law established in the Law the validity of the licence is repealed and no new licence is issued. In this context it needs to be noted that the strictest legal liability, which is applied to the violator of law—a person—for violations of law established in the Law, is namely monetary sanctions and the repeal of the validity of the licence as well as the non-issuance of new licences.

17. The Constitutional Court has held that, in a democratic state under the rule of law, the legislature has the right and duty to prohibit, by means of laws, any deeds that may essentially harm people, society or interests of the state or there might be a threat of such harm to occur (the Constitutional Court’s rulings of 8 May 2000, 10 June 2003, 29 December 2004 and 10 November 2005). While establishing in laws as to which deeds are contrary to law, as well as establishing legal liability for deeds that are contrary to law, the legislature enjoys broad discretion. While taking account of various important factors, the legislature can also amend the corresponding legal regulation.

In this context it needs to be noted that, as it has been held by the Constitutional Court, under the concept of a democratic state, which is consolidated in the Constitution, the state not only seeks to protect and defend the person and society from crimes and other dangerous violations of law, but also is able to do this efficiently (the Constitutional Court’s rulings of 29 December 2004 and 16 January 2006).

18. As mentioned before, tobacco products are categorised as special products and a special state legal regulation is applied to trade in such products, and to other types of activity related to them and their consumption.

In its ruling of 3 November 2005, the Constitutional Court held that tobacco use is harmful to health and can give rise to negative social effects. Due to this, tobacco products should be categorised as special products whose production, circulation and consumption may and must be controlled by the state, which, under the Constitution, is, inter alia, under obligation to look after the health of the people (Paragraph 1 of Article 53 of the Constitution) and is empowered to regulate economic activity so that it serves the general welfare of the Nation (Paragraph 3 of Article 46 of the Constitution); the legislature, which has the right, under the Constitution, to establish the means and a procedure for control over tobacco as a special product, may establish special legal regulation, inter alia, certain prohibitions, limitations, etc., which are not characteristic of the legal regulation of relations of production, circulation and consumption of other products; the disregard of the means and procedure—prohibitions, limitations, etc.—of tobacco control, which are established by law, and other violations of requirements of production, circulation and consumption of tobacco and its products, which are established by means of other legal acts, are harmful to the economic system of the state, inter alia, its financial order; under the Constitution, the legislature enjoys the powers to establish legal liability for violations of the said legal regulation, inter alia, to establish the respective sanctions for violators of law; these sanctions can also be strict for violators of law; alongside, it needs to be emphasised that in itself (without an assessment of the character, danger (gravity), the scale and other features of a certain violation of law) the consolidation of strict (for violators of law) sanctions for violations of the requirements of production, circulation and consumption of tobacco and its products cannot be construed as unfair or inadequate to the respective violation of law.

19. It has been held in this ruling of the Constitutional Court that Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law is not in conflict with Paragraph 5 of Article 31 and Paragraph 1 of Article 109 of the Constitution, and with the constitutional principles of a state under the rule of law and of justice. Thus, the sanction—the repeal of the validity of the licence—established in Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law, which has (had) to be applied to a person together with another sanction—a monetary fine—established in this paragraph, was, doubtless to say, reasonable from the constitutional point of view. As already mentioned, the repeal of the validity of the licence is not an end in itself, it is the condition and precondition of the non-issuing of a new licence; the non-issuing of a new licence extends and supplements, and essentially gives sense to the action of the repeal of the validity of the licence, as the repeal of the validity of the licence itself would hardly have any clearly definable sense if the violator of law—the economic subject—whose licence was repealed for non-compliance with the imperative requirements of law could immediately get the same licence anew.

20. Taking account of what has been set forth, the conclusion should be drawn that there are not any sufficient legal arguments which would permit asserting that the fact that the impugned provision “New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article” of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law consolidates that the validity of the licences shall be repealed and new licences shall not be issued to the persons who committed the violations of law specified in the Law, in itself (without assessing a certain character of the violation of law, its danger (gravity), scale, other factors, and other circumstances) is unfair or inadequate to the corresponding violation of law.

21. Paragraph 1 (wording of 20 November 2003) of Article 31 of the Law consolidates the right of the person who disagrees with a decision to apply an economic sanction (inter alia, the repeal of the validity of the licence) against him to lodge a complaint against such a decision with a court. It needs to be noted that it has been held in this ruling of the Constitutional Court that Paragraph 1 (wording of 20 November 2003) of Article 31 of the Law to the extent that it does not provide for the possibility for a court, taking account of the nature of the violation of law, its extent, the circumstances mitigating the liability and other significant circumstances and following the principles of justice and reasonableness, to decide that this sanction—the repeal of the validity of the licence—does not have to be applied to persons, because due to certain very important circumstances it is obviously disproportionate (inadequate) to the committed violation of law, thus, unfair, is in conflict with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice.

The control over the reasonableness and lawfulness of decisions adopted by institutions established in the Law to apply a sanction to a person—the repeal of the validity of a licence—is secured by courts. A court, while taking account of the character of the violation of law, its scale, the circumstances which mitigate the liability as well as other important circumstances, and while following the criteria of justice and reasonableness, has the right to decide that the sanction—the repeal of the validity of the licence—cannot be applied to the persons, if, due to certain very important circumstances, it is clearly disproportionate (inadequate) to the committed violation of law and is thus unfair.

22. Taking account of the arguments set forth, the conclusion should be drawn that the provision “New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article” of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law to the extent that it provides that upon the repeal of the validity held by the enterprises new licences shall not be issued was not in conflict with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law.

IV

On the compliance of Item 39 (wording of 18 December 2006) of the Rules for Licensing Retail Trade in Tobacco Products as approved by Item 1.1 of the Government Resolution (No. 383) “On Approving the Rules for Licensing Retail Trade in Alcohol Products and the Rules for Licensing Retail Trade in Tobacco Products” of 7 April 2004 with Paragraph 5 of Article 31, Paragraph 1 of Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law, and on the compliance of Item 40 (wording of 18 December 2006) of the Rules with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of justice and a state under the rule of law.

1. As mentioned before, inter alia, the following is impugned in the constitutional justice case at issue:

the compliance of the provision “The validity of the licence shall be repealed if <…> 39.6. the enterprise has violated the conditions of the licensed activity which are established in one of these items—30.2.1., 30.2.2, 30.2.3, or 30.2.4” (wording of 7 April 2004) of Item 39 (wording of 18 December 2006) of the Rules as approved by government resolution No. 383 of 7 April 2004 with Paragraph 5 of Article 31, Paragraph 1 of Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice (petition No. 1B-12/2007);

the compliance of the provision “The enterprise with regard to which the validity of the licence was repealed due to the reasons specified in one of these items—39.6, 39.7 <…>—shall not be issued a new licence repeatedly” of Item 40 (wording of 18 December 2006) of the Rules as approved by government resolution No. 383 of 7 April 2004 to the extent that it provides that upon the repeal of the validity of the licence a new licence is not issued repeatedly, with Paragraph 1 of Article 109 of the Constitution and the constitutional principles of a state under the rule of law and justice (petition No. 1B-12/2007).

2. On 7 April 2004, the Government adopted the Resolution (No. 383) “On Approving the Rules for Licensing Retail Trade in Alcohol Products and the Rules for Licensing Retail Trade in Tobacco Products” which came into force on 1 May 2004. By Item 1 of this resolution the Rules for Licensing Retail Trade in Tobacco Products were approved.

Item 39 (wording of 7 April 2004) of the Rules established the following:

39. The validity of the licence shall be repealed if:

39.1. the holder of the licence submits an application requesting the repeal of the validity of the licence;

39.2. the enterprise is liquidated or reorganised while completing its activity as an independent economic subject;

39.3. the enterprise to whom the validity of the licence was suspended according to the requirements of Item 37 of these Rules does not remove, within the established time period, the violations due to which the validity of the licence was suspended;

39.4. in the same place of trade and within one year of imposition of a fine, there is a repeated violation of the prohibition on selling tobacco products to persons who are under 18 years of age, which is established in the Republic of Lithuania’s Law on Tobacco Control (the validity of the licence is repealed in the place of trade in which the violation is established);

39.5. within one year of the imposition of a fine, the enterprise repeatedly violates the conditions of the licensed activity established in one of these items—30.1, 30.2.5, or 31;

39.6. the enterprise has violated the conditions of the licensed activity which are established in one of these items—30.2.1., 30.2.2, 30.2.3, or 30.2.4;

39.7. for the heads (heads of administration) of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) a court judgment of conviction, a court ruling, decision has become effective, a corresponding decision of the customs, tax inspectorate, police, or the State Tobacco and Alcohol Control Service regarding the imposition of a punishment or penalty for the contraband of tobacco or tobacco products, the marketing, storing or transporting of falsified tobacco products, the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof and, also, for the unlawful storing, transporting or marketing of tobacco products without the special marks—tax stamps—has become effective;

39.8. the enterprise does not eliminate, within the established time period, the reasons due to which it was warned, according to the requirements of Item 36 of these Rules, about possible the repeal of the licence.”

The following was established in Item 40 (wording of 7 April 2004) of the Rules:

40. The enterprise with regard to which the validity of the licence was repealed due to the reasons specified in Item 39.3 or Item 39.4 of these Rules, may be issued a new licence not earlier than one year after the day of the repeal of the validity of the licence.

The enterprise with regard to which the validity of the licence was repealed due to the reasons specified in Item 39.5 of these Rules, may be issued a new licence not earlier than 5 years after the day of the repeal of the validity of the licence.

The enterprise with regard to which the validity of the licence was repealed due to the reasons specified in one of these items—39.6, 39.7 or 39.8—shall not be issued a new licence repeatedly.”

3. On 18 December 2006, the Government adopted the Resolution (No. 1291) “On Amending the Resolution of the Government of the Republic of Lithuania (No. 383) ‘On Approving the Rules for Licensing Retail Trade in Alcohol Products and the Rules for Licensing Retail Trade in Tobacco Products’ of 7 April 2004” (hereinafter also referred to as government resolution No. 1291 of 18 December 2006) which came into force on 22 December 2006.

The following was done by government resolution No. 1291 of 18 December 2006:

by Item 4 thereof Item 39.4 (wording of 7 April 2004) of the Rules was amended: instead of the word “one” the word “three” was entered, instead of the words “in which the violation is established” the words “in which the violation is committed” were entered;

by Item 5 thereof Item 39.4 (wording of 7 April 2004) of the Rules was recognised as no longer valid;

by Item 6 thereof Item 40 (wording of 7 April 2004) of the Rules was amended and set forth in its new wording; Item 40 (wording of 18 December 2006) of the Rules established the following:

40. The enterprise with regard to which the validity of the licence was repealed due to the reasons specified in Item 39.3 of these Rules, may be issued a new licence not earlier than one year after the day of the repeal of the validity of the licence.

The enterprise with regard to which the validity of the licence was repealed due to the reasons specified in Item 39.4 of these Rules, may be issued a new licence not earlier than three years after the day of the repeal of the validity of the licence.

The enterprise with regard to which the validity of the licence was repealed due to the reasons specified in one of these items—39.6, 39.7 or 39.8—shall not be issued a new licence repeatedly.”

It needs to be noted that the legal regulation established in the impugned provision of Item 39 (wording of 18 December 2006) and the impugned provision of Item 40 (wording of 18 December 2006) of the Rules has remained unchanged since 1 May 2004, when the Rules approved by government resolution No. 383 of 7 April 2004 came into force.

4. Item 30 (wording of 7 April 2004) of the Rules, inter alia, provides:

30. The enterprises which hold the licence shall be prohibited: <…>

30.2. from selling, storing and transporting tobacco products, as well as from importing them to the Republic of Lithuania:

30.2.1. without legally valid documents certifying the acquisition or transporting of the tobacco products. The presence of legally valid documents certifying the acquisition or transporting of tobacco products is required in all places of sale and/or storing of tobacco products. While transporting tobacco products, one is required to hold the transportation documents or legally valid documents certifying the acquisition of tobacco products;

30.2.2. if these products are falsified;

30.2.3. if these products are contraband;

30.2.4. without special markings—tax stamps—of the form established by the Ministry of Finance, save the cases when, under the Republic of Lithuania’s Law on Excises (Official Gazette Valstybės žinios, 2001, No. 98-3482; 2004, No. 26-802) and other legal acts, the special markings—tax stamps—are not mandatory”.

5. Item 39 (wordings of 7 April 2004 and 18 December 2006) of the Rules, inter alia, provides:

39. The validity of the licence shall be repealed if: <…>

39.6. the enterprise has violated the conditions of the licensed activity which are established in one of these items—30.2.1, 30.2.3, 30.2.3 or 30.2.4;

39.7. for the heads (heads of administration) of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) a court judgment of conviction, a court ruling, decision has become effective, a corresponding decision of the customs, tax inspectorate, police, or the State Tobacco and Alcohol Control Service regarding the imposition of a punishment or penalty for the contraband of tobacco or tobacco products, the marketing, storing or transporting of falsified tobacco products, the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof and, also, for the unlawful storing, transporting or marketing of tobacco products without the special marks—tax stamps—has become effective <…>.”

6. In the context of the constitutional justice case at issue, it needs to be noted that, under the impugned provision “The validity of the licence shall be repealed if: <…> 39.6. the enterprise has violated the conditions of the licensed activity which are established in one of these items—30.2.1, 30.2.3, 30.2.3 or 30.2.4” (wording of 7 April 2004) of Item 39 (wording of 18 December 2006) of the Rules, the validity of the licence is repealed if the enterprise violates the prohibition (prohibitions) on selling, storing and transporting tobacco products, as well as on importing them to the Republic of Lithuania without legally valid documents certifying the acquisition or transporting of the tobacco products; the presence of legally valid documents certifying the acquisition or transporting of tobacco products is required in all places of sale and/or storing of tobacco products; while transporting tobacco products, one is required to hold the transportation documents or legally valid documents certifying the acquisition of tobacco products (Item 30.2.1 (wording of 7 April 2004) of the Rules); if these products are falsified (Item 30.2.2 (wording of 7 April 2004) of the Rules); if these products are contraband (Item 30.2.3 (wording of 7 April 2004) of the Rules); without special markings—tax stamps—of the form established by the Ministry of Finance, save the cases when, under the Republic of Lithuania’s Law on Excises and other legal acts, the special markings—tax stamps—are not mandatory (Item 30.2.4 (wording of 7 April 2004) of the Rules).

7. It has been mentioned that Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law provides: “For infringement of the prohibitions set forth in Items 1, 2, 3 or 4 of Paragraph 3 of Article 14 of this Law, regarding the marketing of tobacco products, the storing or transporting thereof if that does not incur criminal liability, legal persons and branches of foreign legal persons shall be subject to a fine from LTL 10,000 to LTL 30,000 and the validity of their licence shall be repealed.”

It has been held in this ruling of the Constitutional Court that Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law is not in conflict with Paragraph 5 of Article 31 and Paragraph 1 of Article 109 of the Constitution, and the constitutional principles of a state under the rule of law and justice.

8. The prohibitions established in Items 30.2.1, 30.2.3, 30.2.3 or 30.2.4 (wording of 7 April 2004) of the Rules, for violation of which the repeal of the validity of the licence is provided for in the impugned provision of Item 39 (wording of 18 December 2006) of the Rules, are correspondingly analogous to those established in Items 1, 2, 3 or 4 (wording of 20 November 2003) of Paragraph 3 of Article 14 of the Law, for violation of which the validity of the licence is repealed under Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law.

The legal regulation established in the impugned provision of Item 39 (wording of 18 December 2006) of the Rules implements Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law and, from the aspect that it is impugned, it is identical with the latter.

9. On the grounds of the arguments analogous to those on the grounds of which it was recognised in this ruling of the Constitutional Court that Paragraph 5 (wording of 20 November 2003) of Article 26 of the Law is not in conflict with the Constitution, it needs to be held that the provision “The validity of the licence shall be repealed if: <…> 39.6. the enterprise has violated the conditions of the licensed activity which are established in one of these items—30.2.1, 30.2.3, 30.2.3 or 30.2.4” (wording of 7 April 2004) of Item 39 (wording of 18 December 2006) of the Rules is not in conflict with the Constitution as well.

10. It has been mentioned that Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law used to provide:

17. The validity of the licences held by enterprises shall be repealed, if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) a court judgment of conviction, a court ruling, decision has become effective, a corresponding decision of the customs department, tax inspectorate, police, or the State Tobacco and Alcohol Control Service regarding the imposition of a punishment or penalty for the contraband of tobacco or tobacco products, the marketing, storing or transporting of falsified tobacco products, the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof and, also, for the unlawful storing, transporting or marketing of tobacco products without the special marks—tax stamps—has become effective. New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article.”

It has been held in this ruling of the Constitutional Court that the provision “The validity of the licences held by enterprises shall be repealed, if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) <…> a corresponding decision of <…> the State Tobacco and Alcohol Control Service regarding the imposition of a <…> penalty for <…> the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof <…> has become effective. New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article” of Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law was not in conflict with Paragraph 5 of Article 31 of the Constitution.

11. In the context of the constitutional justice case at issue it needs to be noted that the legal regulation established in the provision “The enterprise with regard to which the validity of the licence was repealed due to the reasons specified in one of these items—39.6, 39.7 <…>—shall not be issued a new licence repeatedly” of Item 40 (wording of 18 December 2006) of the Rules implemented Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law and was virtually analogous to the legal regulation established in Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law.

12. In this context it needs to be noted that, as it has been mentioned, on 26 June 2008, the Seimas adopted the Republic of Lithuania’s Law on Amending and Supplementing Articles 10, 11, 12, 19, and 26 of the Law on Tobacco Control, and by Paragraph 3 of Article 5 of this law Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law on Tobacco Control was recognised as no longer valid; also, by Article 2 of the same law Article 11 (wording of 15 June 2006) of the Law on Tobacco Control was amended and set forth in its new wording. The legal regulation established in Items 5 and 6 of Paragraph 6 and Items 3 and 4 of Paragraph 8 of Article 11 (wording of 26 June 2006) of the Law on Tobacco Control is virtually analogous to the legal regulation established in Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law.

13. On the grounds of the arguments analogous to those upon which it has been recognised in this ruling of the Constitutional Court that Paragraph 17 (wording of 20 November 2003) of Article 26 of the Law was not in conflict with the Constitution, it should be held that the provision “The enterprise with regard to which the validity of the licence was repealed due to the reasons specified in one of these items—39.6, 39.7 <…>—shall not be issued a new licence repeatedly” of Item 40 (wording of 18 December 2006) of the Rules to the extent that after the validity of the licence is repealed a new licence is not issued repeatedly, is not in conflict with the Constitution.

Conforming to Articles 102 and 105 of the Constitution of the Republic of Lithuania and Articles 1, 53, 54, 55 and 56 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

ruling:

1. To recognise that Paragraph 5 (wording of 20 November 2003; Official Gazette Valstybės žinios, 2003, No. 117-5317) of Article 26 of the Republic of Lithuania’s Law on Tobacco Control is not in conflict with the Constitution of the Republic of Lithuania.

2. To recognise that the provision “The validity of the licences held by enterprises shall be repealed, if for the enterprises themselves, heads of the enterprises or for other personnel of the enterprises (who have acted on behalf of the enterprise, or for the interests thereof) <…> a corresponding decision of <…> the State Tobacco and Alcohol Control Service regarding the imposition of a <…> penalty for <…> the marketing, storing or transporting of tobacco products without legally valid documents certifying the acquisition thereof <…> has become effective. New licences shall not be issued to these enterprises and also the enterprises the validity of whose licences shall be repealed in accordance with Paragraph 5 of this Article” of Paragraph 17 (wording of 20 November 2003; Official Gazette Valstybės žinios, 2003, No. 117-5317) of Article 26 of the Republic of Lithuania’s Law on Tobacco Control was not in conflict with the Constitution of the Republic of Lithuania.

3. To recognise that Paragraph 1 (wording of 20 November 2003; Official Gazette Valstybės žinios, 2003, No. 117-5317) of Article 33 of the Republic of Lithuania’s Law on Tobacco Control to the extent that it does not provide for the possibility for a court, taking account of the nature of the violation of law, its extent, the circumstances mitigating the liability and other significant circumstances and following the principles of justice and reasonableness, to decide that this sanction—the repeal of the validity of the licence—does not have to be applied to persons, because due to certain very important circumstances it is obviously disproportionate (inadequate) to the committed violation of law, thus, unfair, is in conflict with Paragraph 1 of Article 109 of the Constitution of the Republic of Lithuania and the constitutional principles of a state under the rule of law and justice.

4. To recognise that the provision “The validity of the licence shall be repealed if: <…> 39.6. the enterprise has violated the conditions of the licensed activity which are established in one of these items—30.2.1, 30.2.3, 30.2.3 or 30.2.4” (wording of 7 April 2004; Official Gazette Valstybės žinios, 2004, No. 53-1799) of Item 39 (wording of 18 December 2006; Official Gazette Valstybės žinios, 2006, No. 139-5320) of the Rules for Licensing Retail Trade in Alcohol Products as approved by the Resolution of the Government of the Republic of Lithuania (No. 383) “On Approving the Rules for Licensing Retail Trade in Alcohol Products and the Rules for Licensing Retail Trade in Tobacco Products” of 7 April 2004 and the provision “The enterprise with regard to which the validity of the licence was repealed due to the reasons specified in one of these items—39.6, 39.7 <…>—shall not be issued a new licence repeatedly” of Item 40 (wording of 18 December 2006; Official Gazette Valstybės žinios, 2006, No. 139-5320) of the same rules to the extent that after the validity of the licence is repealed a new licence is not issued repeatedly, are not in conflict with the Constitution of the Republic of Lithuania.

This ruling of the Constitutional Court is final and not subject to appeal.

The ruling is pronounced in the name of the Republic of Lithuania.

Justices of the Constitutional Court: Armanas Abramavičius
                                                                      Toma Birmontienė
                                                                      Pranas Kuconis
                                                                      Kęstutis Lapinskas
                                                                      Egidijus Šileikis
                                                                      Algirdas Taminskas
                                                                      Romualdas Kęstutis Urbaitis