Decision U.no.35/2017

U.no.35/2017

On the basis of Articles 110 and 112 of the Constitution of the Republic of Macedonia and Article 70 of the Rules of the Constitutional Court of the Republic of Macedonia (»Official Gazette of the Republic of Macedonia«, no.70/1992), at its session held on 17 May 2017, the Constitutional Court of the Republic of Macedonia took the following

DECISION

1. – Article 8-a paragraph 1 line 1 and Article 8-a paragraph 2 line 1 of the Electoral Code (“Official Gazette of the Republic of Macedonia”, nos. 40/ 2006, 136/2008, 148/2008, 155/2008, 163/2008, 44/2011, 51/2011, 142/2012, 31/2013, 34/2013, 14/2014, 30/2014, 196/2015, 35/2016, 97/2016, 99/2016, 136/2016 and 142/2016)

– Article 11 paragraph 1 of the Anti-Corruption Law (“Official Gazette of the Republic of Macedonia”, nos. 28/2002, 46/2004, 126/ 2006, 10/2008, 161/2008, 145/2010, 97/2015 and 148/2015 SHALL BE REPEALED.

2. The decision to stop the execution of the actions taken based on the provisions of the laws noted in item 1 of this Decision SHALL BE PUT OUT OF EFFECT.

3. This Decision shall generate legal effects from the date of its publication in the “Official Gazette of the Republic of Macedonia”.

4. Upon the application of the Regional Association of Winegrowers from Tikvesh area “Agrotikveshija 2002” from Kavadarci, through the president Ljupcho Arizanov, with its Resolution U.br.35/2017 dated 10 May 2017 the Constitutional Court of the Republic of Macedonia instigated proceedings for appraising the constitutionality of the provisions of the laws in item 1 of this decision. With the same resolution the Court suspended the execution of the actions taken based on the challenged provisions noted in the above laws. The proceedings was instigated as there was a reasonable question raised before the Court with regard to the accordance of the challenged articles with the Constitution of the Republic of Macedonia.

5. At its session the Court found that under Article 8-a paragraph 1 line 1 of the Electoral Code (“Official Gazette of the Republic of Macedonia”, nos.40/2006, 136/2008, 148/2008, 155/2008, 163/2008, 44/2011, 51/2011, 142/2012, 31/2013, 34/2013, 14/2014, 30/2014, 196/2015, 35/2016, 97/2016, 99/2016, 136/2016 and 142/2016), from the date of the adoption of the decision on announcing elections to the completion of the election of President of the Republic of Macedonia, Representatives in the Assembly of the Republic of Macedonia and the election of the Government of the Republic of Macedonia according to the results of the elections, and from the date of adoption of the decision on announcing elections to the completion of the elections for mayor or members of the council, that is, until the constitution of the Council of the municipalities and the City of Skopje there may not:

– be disposed with budget funds of the Republic of Macedonia, funds of the budget of the municipalities and the City of Skopje, from public funds and funds of public enterprises and public institutions or legal entities disposing with state capital.

Under paragraph 2 line 1 of the same Article of the Code, in the period of 20 days before the start of the election campaign until the conclusion of the election of the President of the Republic of Macedonia, Representatives in the Assembly of the Republic of Macedonia and the election of the Government of the Republic of Macedonia according to the election results and until the completion of the elections for mayor or council members, that is, until the constitution of the council of the municipalities and the City of Skopje there may not:

– be paid subsidies that are not regular monthly payments.

The Court also found that under Article 11 paragraph 1 of the Anti-Corruption Law (“Official Gazette of the Republic of Macedonia”, nos. 28/2002, 46/2004, 126/2006, 10/2008, 161/2008, 145/2010, 97/2015 and 148/2015) from the adoption of the decision on announcing elections to the end of the election of the President of the Republic of Macedonia, and the Representatives in the Assembly of the Republic of Macedonia, as well as the election of mayors and council members of municipalities and the City of Skopje there may not be use of budget funds of the Republic of Macedonia, means from the budgets of municipalities and the City of Skopje, from public funds and public enterprises and public institutions or legal entities managing state capital, unless otherwise provided by law that regulates electoral campaign financing of political parties.

6. Under Article 8 paragraph 1 lines 1, 3 and 5 of the Constitution the fundamental freedoms and rights of the individual and citizen recognised in international law and defined by the Constitution, the rule of law and political pluralism and free direct and democratic elections are the fundamental values of the constitutional order of the Republic of Macedonia.

Pursuant to Article 9 of the Constitution, citizens of the Republic of Macedonia are equal in their freedoms and rights regardless of sex, race, colour, national and social origin, political and religious beliefs, property and social status. Citizens before the Constitution and the laws are equal.

Pursuant to Article 51 of the Constitution, in the Republic of Macedonia laws shall be in accordance with the Constitution and all other regulations in accordance with the Constitution and law. Everyone is obliged to observe the Constitution and the laws.

The challenged provision of Article 8-a of the Electoral Code is included with the Law on Amendments to the Electoral Code (“Official Gazette of the Republic of Macedonia” no.14/2014) which was adopted in a shortened procedure. The reasoning of the Proposed Law states that these amendments to the Electoral Code are continuation of the reform of electoral legislation in order to improve the legislation in line with the comparative analysis of European legislation, and to provide appropriate activities for consistent implementation of election-related legislation. In respect of Article 8-a, the reasoning of the Proposed Law states that the purpose of the amendment of Article 8-a is to fulfill the recommendation to separate the state from the party.

From the content of Article 8-a of the Electoral Code it arises that it defines to be illegal that is prohibited certain activities related to the use of public resources in order to prevent the misuse of public resources during the election process (disposing with budget funds, starting construction of infrastructure facilities such as roads, water supply systems, power lines, etc. with means from the budget or public funds, making payments of salaries, pensions, social aid and other payments that are not regular monthly payments, new employment or termination of employment in government or public institutions, paying subsidies, holding public events marking the start of construction or commissioning of facilities built with budgetary funds).

The period in which the prohibitions of Article 8-a paragraph 1 are valid is the one from the adoption of the decision to call elections to the completion of the election of the President of the Republic of Macedonia, Representatives in the Assembly of the Republic of Macedonia and the Government of the Republic of Macedonia, in accordance with the electoral results, and from the date of the decision to call elections to the completion of the elections for mayor or council members, that is to the constitution of the council of the municipalities and the City of Skopje, except for the prohibitions referred to in paragraph 2 of this Article which commence 20 days before the start of the electoral campaign.

7. From the analysis of the challenged provision of Article 8-a paragraph 1 line 1 it appears that it prohibits the disposal of budget funds of the Republic of Macedonia, means from the budgets of the municipalities and the City of Skopje, from public funds and funds of public enterprises and public institutions or legal entities disposing with state capital. Thereby, neither did the legislator in this provision nor in any other provision of this Code or any other law define the term disposal with budget funds. There is no legal definition of the notion disposal with budget funds in the Budgets Law and the laws on execution of budgets that are adopted each year, or in other laws in the financial field.

Taking into account the purposes for which the amendments to Article 8-a of the Electoral Code were adopted – which are to separate the state from the party and prevent the misuse of public money during the elections, it appears that in this provision the legislator should have determined the illegal, that is, prohibited forms of disposal with budget funds, and not any disposal with budget funds, because the payment of salaries or pensions, for example, is a form of disposal with or use of public money, which is allowed disposal with budget resources or public funds. However, from the wording of the contested provision of Article 8-a paragraph 1 line 1 it arises that with it the legislator established as inadmissible any disposal with budget funds and public funds, that is, did not establish illegal disposal in it. The legislator established the illegal forms of disposal in other lines of this article of the Electoral Code (Article 8-a paragraph 1 lines 2, 3 and 4) with prohibition of for instance the commencement of construction of infrastructure facilities, extraordinary payments of salaries and pensions, employment of new people in state and public institutions, and so on.

This interpretation of the provision of Article 8-a paragraph 1 line 1 of the Electoral Code derives also from Article 165-c of the Criminal Code in which violations of the provisions of Article 8-a are defined as crimes. Article 165-c of the Criminal Code is entitled “Unlawful disposal with budget funds during elections.” Pursuant to this article:

(1) The holder of a public office who contrary to the prohibitions set out in the Electoral Code begins construction with funds from the Budget or from public funds or assets of public companies and other legal entities managing state capital of new facilities in infrastructure such as roads, water supply systems, power lines, sewers, playgrounds and other facilities or facilities for social activities, schools, kindergartens and other facilities, if for that purpose no funds have been provided previously from the budget, that is, it is no work on the realisation of a programme adopted on the basis of law in the current year, shall be punished with imprisonment from six months to one year.

(2) The holder of a public office who contrary to the prohibitions set out in the Electoral Code makes payment of salaries, pensions, subsidies, social benefits or other payments and material benefits from the budget or from public funds that are not regular monthly payments, that is, all annual transfers and payments or one-time transfers from the budget or from public funds or misappropriation of state capital or signing collective agreements, shall be punished with imprisonment of three to five years.

(3) The holder of a public office who contrary to the prohibitions set out in the Electoral Code the organizes the holding of a public event marking the start of construction or commissioning of the facility from means from the Budget or public funds or assets from public enterprises or other legal entities managing state capital, in infrastructure such as roads, water supply systems, power lines, sewers, sports playgrounds and other facilities or facilities for social activities, schools, kindergartens and other facilities, shall be punished with imprisonment of six months to one year.

(4) The Minister of Finance who from the day the of adoption of the decision on announcing elections to the completion of the election of the President, Representatives in the Assembly of the Republic of Macedonia and the election of the Government of the Republic of Macedonia, according to the election results, as well as from the date of the adoption of the decision to announce elections to the completion of the elections for mayor or council members, that is, to the constitution of the council of the municipalities and the City of Skopje shall not publicly post on the website, in specific base for budget spending, all budget payments, except regular salaries, pensions and utilities expenses, pursuant to law, shall be punished with imprisonment from six months to one year.

(5) The Minister of Finance, who shall not submit or on the website of the Ministry of Finance shall not post the election financial report two weeks after the announcement of the elections which will include an overview of all projected and realised revenues and expenditures from the Budget by items, in the period from the beginning of the fiscal year to the date of submission of the report, pursuant to the Electoral Code, shall be punished with imprisonment from six months to one year.

From the said content of Article 165-c of the Criminal Code, which sanctions the unlawful disposal of budget funds during elections, it appears that in different paragraphs of this article the legislator has established special forms of committing this crime with a description of the specific actions of commission corresponding to the prohibitions set out in Article 8-a paragraph 1, lines 2 and 3, paragraph 2 lines 1 and 2 and paragraphs 3 and 4 of the same article of the Electoral Code. From the wording of the provision of Article 165-c of the Criminal Code it arises that no provision of this article the very disposal with budgetary resources (as formulated in Article 8-a paragraph 1 line 1) is not defined as a crime or special form of crime, but the specifically defined activities are prescribed as a crime (in the other lines of Article 8-a) which are regarded as illegal or unlawful disposal of budget funds. Hence, the Court finds as a logical conclusion that every disposal with budget funds during elections is not illegal disposal and is not a crime, but only those activities that represent abuse of public money and funds and whose forms are defined in Article 165-c of the Criminal Code.

This view of the Court is corroborated and is in line with international standards pertaining to this issue. Namely, internationally this issue is dealt with by the Venice Commission which in 2013 adopted the Report on the misuse of administrative resources during electoral processes – Document CDL-AD(2013)033 of 16 December 2013. From the title and content of this document it follows that it regulates the misuse of administrative resources during elections, not every form of their use. Regarding the definition of “misuse of public resources” it states that it is widely accepted that it covers the unlawful conduct of public officials, political candidates and parties in power to use their official position or relationship with government institutions in order to influence the outcome of the election. Item 10 of the report states that: “The report clearly distinguishes between the use and abuse of administrative resources. The use of resources should be permitted by law; it implies a legal possibility to use administrative resources during the election process for the proper functioning of the institutions, provided that such use is not for the purposes of the campaign. By contrast, abuse of public resources should be sanctioned by law because of the unlawful use of public resources by those in power and state officials for campaign purposes.”

The Joint Guidelines for preventing and responding to the misuse of administrative resources during electoral processes – Document CDL-AD(2016)004 of 14 March 2016, adopted jointly by the Council of Europe Venice Commission and the OSCE Office for Democratic Institutions and Human Rights – ODIHR, note the rule of law as one of the basic principles that are essential to prevent the misuse of administrative resources during the electoral process. Section 1.1. of the Joint Guidelines indicates that “the legal framework should provide for a general prohibition of abuse of administrative resources during the election process. The ban should be determined in a clear and predictable manner. There should be sanctions for misuse of administrative resources and they should be implemented.”

Apart from the Venice Commission and the OSCE, the issue of misuse of administrative resources during elections (more in terms of regional and local elections) is also dealt with by the Congress of Local and Regional Authorities of the Council of Europe. The document entitled “Abuse of administrative resources during the electoral process: the role of local and regional elected representatives and public officials” in item 27 states: “The prohibition of abuse of state resources is aimed at protecting the integrity of the electoral process and providing field for fair competition for all participants. It is a complex phenomenon due to the heavy line of demarcation between the use of state resources in the legitimate performance of government functions and actions constitute abuse of those resources and giving an unfair advantage to the party in power.” In item 28 it is indicated that the rules to prevent the abuse of administrative resources must be analysed in terms of their impact on the necessary continuity and efficiency of government operations. Thus, long-term projects or urgent measures must be distinguished from government activities related mainly to the election campaign. While the former are generally acceptable, even necessary, the measures that mainly concern the campaign should be prevented.”

The content of the challenged provision of Article 8-a paragraph 1 line 1 of the Electoral Code, analysed in terms of the requirements and recommendations contained in these international documents, it appears that the legal provisions to prevent abuse of public resources during elections should make a clear and precise distinction between permissible and illegal disposal of budget funds. According to the Court’s assessment, the contested provision of Article 8-a paragraph 1 line 1 of the Electoral Code does not establish in a clear and precise manner which disposal with budgetary resources during the election process is considered illegal and as such prohibited. As insufficiently precise and clear the challenged provision creates legal uncertainty, as a result of which the Court finds that it is not in compliance with the constitutional principle of the rule of law under Article 8 paragraph 1 line 3 of the Constitution of the Republic of Macedonia.

Considering that Article 11 paragraph 1 of the Anti-Corruption Law regulates the same issue as the provision of Article 8-a paragraph 1 line 1 of the Electoral Code, in relation to this Article the Court also finds that it is not in accordance with the constitutional principle of the rule of law under Article 8 paragraph 1 line 3 of the Constitution.

8. In terms of the provision of Article 8-a paragraph 2 line 1 of the Electoral Code, from its content it arises that the legislator has forbidden to pay subsidies that are not regular monthly payments in the period from 20 days before the start of the election campaign to the end the election of President of the Republic of Macedonia, representatives of the Assembly of the Republic of Macedonia and the election of the Government of the Republic of Macedonia in accordance with the election results and until the completion of the elections for mayor or council members, that is until the constitution of the council of the municipalities and the City of Skopje.

Subsidies in agriculture are regulated in the Law on Agriculture and Rural Development (“Official Gazette of the Republic of Macedonia” nos.49/2010, 53/2011, 126/2012, 15/2013, 106/2013, 177/2014, 25/2015, 73/2015, 83/2015, 154/2015, 11/2016, 53/2016, 120/2016 and 163/2016). Article 3 of this Law defines the objectives of national agricultural policy which are aimed at:

– providing stable production of quality and cheaper food and providing the population with sufficient quantities of food,
– increasing the competitiveness of agriculture,
– providing a stable level of income of agricultural holdings,
– sustainable development of rural areas, and
– optimal use of natural resources while respecting the principles of protection of nature and the environment.

Paragraph 2 of this Article of the Law stipulates that the aims of paragraph (1) of this Article shall be implemented through measures and policy instruments for:
1) arranging and supporting agricultural markets,
2) direct payments, and
3) rural development

Subsidies for which the Law uses the term direct payments, in Article 47 are defined as a measure to support the income of agricultural holdings and purchasers of agricultural products registered in the register of Article 33 of this Law. Direct payments are paid to agricultural holdings by agricultural land area, agricultural product unit and livestock, and to purchasers of agricultural products registered in the register of Article 33 of this Law for purchased agricultural products. The amount of direct payments referred to in paragraph 2 of this Article shall be determined depending on the type of crop, type, class and quality of agricultural products and livestock.

Pursuant to Article 61 of the Law, the payment of direct payments may not be made before it is determined that the user fulfills the conditions for granting direct payments. (2) Payments are made directly to the agricultural holdings, in the current calendar year, or in case of lack of funds or due to prolonged administrative procedures for objective reasons, no later than 30 June in the following calendar year.

From what has been noted it arises that subsidies represent economic budget transfers that primarily aim to encourage the development of certain economic activities through direct payments to the subjects performing those activities (ex. farmers). Although their purpose is primarily economic, there is no doubt that as a form of material assistance they also have a social function to protect the standard of certain categories of citizens who are their beneficiaries.

Hence, the ban on the payment of subsidies which is prescribed in the challenged provision of Article 8-a paragraph 2 line 1 of the Electoral Code, according to the Court, is a limitation of the rights of citizens who are beneficiaries of subsidies and who acquire this right on the basis of fulfillment of certain conditions and in a procedure prescribed by law. The contested ban on paying subsidies questions the realisation of the legitimate expectations of this category of citizens who have already invested in agricultural production and legitimately expect that some of the invested money and capital will be returned via subsidies. Considering that the protection of legitimate expectations of the subjects of law is an integral element of the principle of the rule of law, it appears that the disputed provision of Article 8-a paragraph 2 line 1 of the Electoral Code is not in accordance with this constitutional principle which is a fundamental value of the constitutional order of the Republic of Macedonia.

Moreover, the Court considers as founded the allegations noted in the initiative that in the challenged provision the prohibition applies to beneficiaries of subsidies only, not mentioning other types of payments for other categories of citizens, such as beneficiaries of scholarships for pupils and students. With the establishment of the ban on payment of subsidies only that are not regular monthly payments, these beneficiaries of state aid are put in an unequal position with other users of state aid, as a result of which the challenged provision is not in accordance either with the constitutional principle of equality of citizens under Article 9 of the Constitution of the Republic of Macedonia.

9. On the basis of what has been noted, the Court decided as in items 1 and 2 of the present Decision.

10. The Court took the present decision by a majority vote in the following composition: Mr Nikola Ivanovski, President of the Court, and the judges: Dr Natasha Gaber-Damjanovska, Mrs Elena Gosheva, Mr Ismail Darlishta, Mr Jovan Josifovski, Mrs Vangelina Markudova, Mr Sali Murati, Dr Gzime Starova and Mr Vladimir Stojanoski. (U.br.35/2017)

Leave a Reply