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On criminal prosecution as grounds for declaring a person incompatible with the interests of national security

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Case no 2-A/2020-3-A/2020

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA
IN THE NAME OF THE REPUBLIC OF LITHUANIA

RULING
ON THE COMPLIANCE OF POINT 4 OF ARTICLE 11 OF THE REPUBLIC OF LITHUANIA’S LAW ON THE PROTECTION OF OBJECTS OF IMPORTANCE TO ENSURING NATIONAL SECURITY WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA

4 March 2021, no KT36-A-N2/2021
Vilnius

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Elvyra Baltutytė, Gintaras Goda, Vytautas Greičius, Danutė Jočienė, Giedrė Lastauskienė, Algis Norkūnas, Daiva Petrylaitė, Janina Stripeikienė, and Dainius Žalimas

The court reporter – Vaiva Matuizaitė

The Constitutional Court of the Republic of Lithuania, pursuant to Articles 102 and 105 of the Constitution of the Republic of Lithuania and Articles 1 and 531 of the Law on the Constitutional Court of the Republic of Lithuania, at the hearing before the Court on 28 January 2021 and 4 February 2021, considered, under written procedure, constitutional justice case no 2-A/2020-3-A/2020 subsequent to:

petition no 1A-24/2019 of the petitioners – [data not made public] ([data not made public]), [data not made public], and [data not made public] – requesting an investigation into whether point 4 of Article 11 of the Republic of Lithuania’s Law on the Protection of Objects of Importance to Ensuring National Security (wording of 12 January 2018), insofar as, according to the petitioners, that point provides that a person is recognised as not complying with national security interests if he/she is accused of committing a grave, serious, or less serious crime, although there is no effective court judgment convicting that person, with paragraph 1 of Article 31 of the Constitution of the Republic of Lithuania;

    •  

petition no 1A-25/2019 of the petitioner – [data not made public] – requesting an investigation into whether point 4 of Article 11 of the Republic of Lithuania’s Law on the Protection of Objects of Importance to Ensuring National Security (wording of 12 January 2018), insofar as, according to the petitioner, that point provides that a person is recognised as not complying with national security interests if he/she is accused of committing a grave, serious, or less serious crime, although there is no effective court judgment convicting that person, with paragraph 1 of Article 31 of the Constitution of the Republic of Lithuania.

By the decision of the Constitutional Court of 21 January 2021, the above-mentioned petitions were joined into one case, which was given reference no 2-A/2020-3-A/2020.

The Constitutional Court

has established:

I

The circumstances of the petition and the arguments of the petitioners

1. The petitioners have applied to the Constitutional Court with the petition requesting an investigation into whether point 4 of Article 11 of the Republic of Lithuania’s Law on the Protection of Objects of Importance to Ensuring National Security (wording of 12 January 2018) (hereinafter referred to as the Law), insofar as, according to the petitioners, that point provides that a person is recognised as not complying with national security interests if he/she is accused of committing a grave, serious, or less serious crime, although there is no effective court judgment convicting that person, with the presumption of innocence, which is enshrined in paragraph 1 of Article 31 of the Constitution of the Republic of Lithuania.

2. By means of the resolution (No 526) of 6 June 2018 on the recognition of a transaction as incompatible with national security interests and the resolution (No 597) of 20 June 2018 on the recognition of a transaction as incompatible with national security interests, the Government of the Republic of Lithuania, invoking paragraphs 7 and 8 of Article 13 of the Law, taking into account, among others, the criterion laid down in point 4 of Article 11 of the Law, recognised as incompatible with national security interests transactions concerning international purchases (regarding concrete sleepers and track fastenings) that had been planned by the company Lietuvos geležinkeliai to be concluded with the petitioner – [data not made public], since, among others, an accusation regarding a corruption-related crime had been initiated against the owner – [data not made public], a petitioner – of the group of companies [data not made public], registered in the Republic of Estonia, that manage the shares of the intended transaction party – [data not made public], a petitioner.

By means of the order of 22 August 2019, the Supreme Administrative Court of Lithuania rejected the complaints of the petitioners, requesting the annulment of the above-mentioned government resolutions.

3. The petitions are based on the following arguments.

3.1. Substantiating their position on the compliance of the legal regulation enshrined in point 4 of Article 11 of the Law with the presumption of innocence, which is enshrined in paragraph 1 of Article 31 of the Constitution, the petitioners – [data not made public], [data not made public], and [data not made public] – point out that state authorities that apply that legal regulation are granted the right to hold a person de facto guilty solely by reason of criminal prosecution carried out against that person and to impose on him/her measures of a negative nature, thus limiting the civil rights of that person. The petitioner – [data not made public] – notes that the courts, when interpreting the provision of point 4 of Article 11 of the Law, have stated that the mere fact that criminal proceedings have been brought against an investor is sufficient to declare that person incompatible with national security interests. In view of this, the petitioner claims that a person may be prohibited from investing in Lithuania or entering into transactions with an enterprise important for national security on the sole ground that the said person is under a pre-trial investigation or charges have been brought against him/her, even though they have not been confirmed by an effective court judgment convicting that person. In the opinion of the petitioner, such a legal regulation is unjustified and denies the principle of the presumption of innocence, which is enshrined in the Constitution.

3.2. The petitioners substantiate their position by the following provisions of the official constitutional doctrine: the presumption of innocence consolidated in paragraph 1 of Article 31 of the Constitution is one of the most important guarantees of the administration of justice in a democratic state; it is not only a fundamental principle of administering justice in the process of criminal cases, but also an important guarantee of human rights and freedoms; the presumption of innocence, when evaluated in the context of other provisions of the Constitution, has a broader content and must not be associated with criminal legal relationships only; it is especially important that state institutions and officials respect the presumption of innocence; a state institution or official may not hold a person guilty if his/her guilt is not recognised by an effective court judgement.

II

The arguments of the representatives of the party concerned

4. In the course of the preparation of the case for the hearing before the Constitutional Court, written explanations were received from Dainius Zebleckis, a senior adviser at the Private Law Unit of the Legal Department of the Office of the Seimas, and Svetlana Zamara, a senior adviser at the Public Law Unit of the same department, acting in the capacity of the representatives of the Seimas, the party concerned, in which it is maintained that the impugned legal regulation is not in conflict with the Constitution. The position of the representative of the Seimas is based on the following arguments.

4.1. The representatives of the party concerned note that the condition of point 4 of Article 11 of the Law, under which, if criminal prosecution is carried out against an investor for committing a grave, serious, or less serious crime, the investor is considered to be incompatible with national security interests, is an independent alternative condition indicating that the investor does not meet national security interests, without linking that condition to the expiry or expungement of the said person’s conviction.

4.2. The representatives of the party concerned note that the rule, consolidated in point 4 of Article 11 of the Law, that an investor is considered to be incompatible with national security interests if criminal prosecution is carried out against that person for committing a grave, serious, or less serious crime covers situations where, in the criminal proceedings regarding a grave, serious, or less serious crime, such a person has the status of either a suspect or an accused person. Therefore, the impugned norm of point 4 of Article 11 of the Law applies only when, according to the representatives of the party concerned, there is a certain amount of data from which it may be presumed that a particular investor may have committed one or more less serious, serious, or grave crimes. It is precisely the presence of those data that de facto restricts the investor’s ability to acquire shares or bonds of companies that are important for national security, as well as the rights, specified in the Law, to equipment, property, etc. that are important for national security, as the presence of such data, confirmed by the investor’s status of a suspect or an accused person in criminal proceedings, casts doubt on the credibility of the investor.

4.3. According to the representatives of the party concerned, such a legal situation where the data from which it may be presumed that a criminal act may have been committed give rise to certain negative consequences both related and not related to criminal proceedings does not in itself mean that the principle of the presumption of innocence, enshrined in paragraph 1 of Article 31 of the Constitution, is violated. The representatives of the party concerned note that ensuring national security interests is the most important goal of the domestic and foreign policy of the state. The representatives of the party concerned draw attention to the fact that, according to points 11 and 12 of the National Security Strategy, approved by the resolution (no IX-907) of the Seimas of 28 May 2002 on the approval of the National Security Strategy (wording of 17 January 2017), vital interests of national security are, for example, sovereignty, territorial integrity, democratic constitutional order, etc., and the primary interests of national security are the viability and unity of NATO and the EU, security, solidarity, democracy, welfare of all states of the Euro-Atlantic community, etc. In the opinion of the representatives of the party concerned, the desire to protect the national security interests of special importance and constitutional significance, as well as the desire to guarantee the appropriate protection of classified information, as analysed by the Constitutional Court in its ruling of 7 July 2011, gives the state the right to establish by law exclusive and particularly stringent requirements for investors seeking to acquire the objects of civil rights specified in paragraph 2 of Article 2 of the Law or to exercise other rights provided for by law. Those requirements must help to protect against any potential threats and ensure the maximum credibility of investors, i.e. guarantee that they are only such persons whose reputation does not cast any doubt on the lawfulness of their activities; therefore, the mere doubt that the investor may have committed a criminal act is reasonably considered sufficient grounds for declaring such a person incompatible with national security interests.

4.4. The representatives of the party concerned note that, according to the provisions of the Law, the bodies making decisions regarding an investor’s compliance with national security interests – the Commission for Coordination of the Protection of Objects of Importance to Ensuring National Security (hereinafter also referred to as the Commission) and the Government – do not resolve issues relating to the guilt of persons and do not administer justice in criminal proceedings. The said entities do not in any way exercise the exclusive competence of a court, which is entrenched in paragraph 1 of Article 31 of the Constitution, to declare a person guilty of committing a criminal act. Although the recognition that an investor is incompatible with national security interests restricts the freedom of economic activity of such a person, it does not, however, have the characteristics of punishment (it does not involve a conviction, it does not seek to punish a person, etc.).

4.5. The representatives of the party concerned draw attention to the fact that, by means of its ruling of 7 July 2011, the Constitutional Court declared compatible with paragraph 1 of Article 31 of the Constitution the legal regulation, enshrined in point 13 of paragraph 2 of Article 16 of the Republic of Lithuania’s Law on State and Official Secrets (wording of 16 December 2003), under which the fact that a person is being prosecuted for committing an intentional criminal act constitutes sufficient grounds for refusing such a person the issuance of an authorisation to handle or access classified information. On the other hand, according to the impugned paragraph 4 of Article 11 of the Law, a person is considered to be incompatible with national security interests if he/she is prosecuted not for any intentional criminal act, but only for a possibly committed less serious, serious, or grave crime. Thus, according to the representatives of the party concerned, the legal regulation impugned by the petitioners restricts the rights of persons even less than the provisions of the Law on State and Official Secrets analysed in the ruling of the Constitutional Court of 7 July 2011, since point 4 of Article 11 of the Law does not cover cases where a person is suspected or accused of committing a criminal offence or a minor crime.

III

The material received in the case

5. In the course of the preparation of the case for the hearing before the Constitutional Court, written explanations were received from the advocates Daiva Ušinskaitė-Filonovienė and Greta Roguckytė – the representatives of the petitioner – [data not made public], as well as from the advocate Miroslav Nosevič – the representative of the petitioners – [data not made public], [data not made public], and [data not made public], in which an opinion was submitted regarding the arguments set out in the written explanations of the representatives of the Seimas, and which put forward additional arguments regarding the compliance of the impugned legal regulation with the Constitution.

5.1. The representatives of the petitioners maintain that, according to the legal regulation laid down in point 4 of Article 11 of the Law, the mere fact that a pre-trial investigation has been launched against a person is sufficient to completely prevent the party to the transaction from carrying out economic and commercial activities in Lithuania; the long-term negative consequences are felt not only by the person against whom such an investigation is initiated, but also by other persons, who may not even be aware of the fact of the pre-trial investigation or, in particular, of the circumstances surrounding it.

5.2. According to the representative of the petitioners – [data not made public], [data not made public], and [data not made public], in the event of competition between two constitutional values, those values must be reconciled without giving in advance absolute priority to the state interests; therefore, the mechanism, consolidated in the Law, which puts the interests of the state above the other constitutional rights – presumption of innocence and freedom of economic activity – and creates the conditions for state institutions to punish persons (inter alia, enterprises) against whom no criminal prosecution is carried out in the absence of their guilt, and to restrict competition in the market on the pretext of mere assertions of primary and vital interests, is incompatible with the Constitution.

The Constitutional Court

holds that:

I

The impugned and related legal regulation

6. On 10 October 2002, the Seimas adopted the Republic of Lithuania’s Law on Enterprises and Facilities of Strategic Importance to National Security and Other Enterprises of Importance to Ensuring National Security, which has been amended and supplemented on several occasions, inter alia, by means of the Republic of Lithuania’s Law Amending the Law (No IX-1132) on Enterprises and Facilities of Strategic Importance to National Security and Other Enterprises of Importance to Ensuring National Security, which was adopted by the Seimas on 12 January 2018 and entered into force (with a certain exception) on 1 March 2018 (Article 2); that law set out the Law on Enterprises and Facilities of Strategic Importance to National Security and Other Enterprises of Importance to Ensuring National Security in its new wording (Article 1), inter alia, changed its title – it was named the Republic of Lithuania’s Law on the Protection of Objects of Importance to Ensuring National Security.

7. According to paragraph 1 of Article 1, titled “Objective and scope of the Law”, of the Law, the objective of that law is to ensure that the objects of importance to ensuring national security (enterprises, facilities, property, and economic sectors) and the property and territory within the protection zones of the enterprises, facilities, and property of importance to ensuring national security are protected against all risk factors that may pose a threat to national security interests and to eliminate the causes of and conditions for the emergence of such factors, and, according to paragraph 7 of Article 2, titled “Definitions”, of the Law, the term “national security interests” mean the vital and primary interests of national security within the meaning of the National Security Strategy, the development of the trans-European infrastructure, and the essential interests of society enshrined in the laws of the Republic of Lithuania, including the provision of the most important services of common interest, etc.

Thus, according to paragraph 1 of Article 1 and paragraph 7 of Article 2 of the Law, the objective of that law is to protect national security interests, inter alia, the interests of the state and society, by ensuring the protection of objects, inter alia, the economic sectors and enterprises, that are important to national security against all risk factors that could threaten the vital and primary interests of the national security of the state, the development of the trans-European infrastructure, and the essential interests of society enshrined in the laws of the Republic of Lithuania, including the provision of the most important services of common interest.

8. Article 11, titled “Criteria for the assessment of an investor’s conformity to national security interests”, of the Law, the constitutionality of point 4 of which, to the extent indicated by the petitioners, is impugned, prescribes:

An investor shall not conform to national security interests if:

(1) at the moment of the application to the Commission he/she is a dominant (within the meaning of the Republic of Lithuania’s Law on the Basics of National Security) importer of fossil energy resources of any kind into the Republic of Lithuania, a person controlled by such an importer or related thereto by cooperation or partnership relations and where the Commission adopts the conclusion and the Government takes the decision that the dominance, control, or relations referred to in this point are considered to be a threat to national security;

(2) at the moment of application to the Commission he/she maintains or, in the past, maintained relations with institutions of foreign states or natural or legal persons from those states which increase the risk or pose a threat to national security;

(3) at the moment of the application to the Commission he/she maintains or, in the past, maintained links with organised groups, special services or groupings of foreign states related to international terrorist organisations or maintaining relations with persons suspected of membership thereof which increase the risk or pose a threat to national security;

(4) he/she has, by an effective court judgment, been found guilty of a grave, serious, or less serious crime under the Criminal Code of the Republic of Lithuania or of a crime under the criminal laws of foreign states which corresponds to the elements of a grave, serious, or less serious crime specified in the Special Part of the Criminal Code of the Republic of Lithuania or criminal prosecution is carried out against that person for committing such a crime and the investor’s conviction for the committed crime has not expired or has not been expunged;

(5) he/she has, by an effective court judgment, been found guilty of a crime/crimes against the independence, territorial integrity, or constitutional order of the State of Lithuania and/or has, over the last 24 months, violated the provisions of this Law and other legal acts regulating the activities of objects of importance to ensuring national security;

(6) he/she fails to provide proof of real possibilities to implement the actions provided for in points 1–5 of paragraph 1 of Article 12 of this Law;

(7) the Commission notifies him/her of the envisaged screening of his/her conformity to national security interests (where the screening is launched on the initiative of the entities referred to in paragraph 5 of Article 12 of this Law) and he/she fails, within the time limit specified in paragraph 6 of Article 12 of this Law, to submit to the Commission the documents and information specified in the Rules of Procedure of the Commission and, due to failure to submit such documents or information, the Commission or the Government does not adopt the decision that the investor conforms to national security interests;

(8) in compliance with other laws, as provided for in paragraph 3 of Article 10 of this Law, an investor from a specific third country may not be an investor;

(9) there are other justified data concerning the investor’s non-conformity to national security interests.”

8.1. Thus, in view of the objective of the Law (which is enshrined in paragraph 1 of Article 1 and paragraph 7 of Article 2 thereof) – the protection of national security interests, inter alia, the interests of the state and society, by ensuring the protection of objects, inter alia, the economic sectors and enterprises, that are important to national security against all risk factors that could threaten the vital and primary interests of the national security of the state, the development of the trans-European infrastructure and the essential interests of society enshrined in the laws of the Republic of Lithuania, including the provision of the most important services of common interest – points 1–9 of Article 11 of the Law lay down criteria for assessing an investor’s conformity with national security interests.

In this context, it should be mentioned that, according to the legal regulation laid down in the Law, the screening of an investor’s compatibility with national security interests is carried out by the Commission for Coordination of the Protection of Objects of Importance to Ensuring National Security, and if it decides that the investor does not meet national security interests, the final decision on the investor’s compatibility with national security interests is taken by the Government (Article 12 of the Law).

8.2. The legal regulation laid down in Article 11 of the Law should be interpreted in the context of paragraph 2 of Article 2 and paragraphs 1 and 7 of Article 10, titled “General provisions concerning investors”, of the Law.

According to paragraph 2 of Article 2 of the Law, the term “investor” means an investor from the Republic of Lithuania, a foreign investor, or a third-country investor that, among others, seeks to acquire or has acquired enterprises (or a certain part thereof), facilities, or property that are important for national security or aims to operate or operates in sectors of the economy that are strategically important for national security. According to paragraph 1 of Article 10 of the Law, natural persons, private or public legal persons or other organisations not posing a threat to national security interests may be investors, and, according to paragraph 7 of the same article, where an investor is a legal person or another organisation, it is considered that it conforms to national security interests provided that the legal person itself and persons controlling it conform to them.

Thus, interpreting the legal regulation laid down in Article 11 of the Law in conjunction with the one laid down in paragraph 2 of Article 2 and paragraphs 1 and 7 of Article 10 of the Law, it should be noted that, according to that legal regulation, an investor may be considered incompatible with national security interests if that investor itself or the persons controlling it are assessed as meeting at least one of the criteria laid down in paragraphs 1–9 of Article 11 of the Law.

8.3. Interpreting paragraph 4 (impugned by the petitioners) of Article 11 of the Law in connection with the aspect relevant to this constitutional justice case, it should be noted that it should not be interpreted literally as linking prosecution as a result of a grave, serious, or less serious crime with a conviction for such a crime. Interpreting point 4 of Article 11 of the Law, account must be taken of the related legal regulation laid down in the Criminal Code of the Republic of Lithuania (wording of 26 September 2000) (hereinafter referred to as the Criminal Code) and the Code of Criminal Procedure of the Republic of Lithuania (wording of 14 March 2002) (hereinafter referred to as the Code of Criminal Procedure).

8.3.1. In this context, it should be mentioned that, according to paragraph 1 (wording of 13 March 2014) of Article 97, titled “Previous conviction”, of the Criminal Code, the persons convicted of the commission of a crime in respect of whom a judgment of conviction passed by a court of the Republic of Lithuania or another Member State of the European Union has become effective are regarded as persons having previous conviction. Thus, under the legal regulation laid down in paragraph 1 (wording of 13 March 2014) of Article 97 of the Criminal Code, the previous conviction of a person is always associated with his/her conviction by a court, i.e. with the entry into effect of a convicting court judgment.

It should also be mentioned that the Code of Criminal Procedure regulates the stages of criminal proceedings – pre-trial investigations and the consideration of cases in courts (Parts IV–VI of the Code of Criminal Procedure), as well as the concepts of a suspect (Article 21, titled “Suspect”, of the Code of Criminal Procedure) and an accused person (Article 22, titled “Accused person”, of the Code of Criminal Procedure). According to the legal regulation established in paragraphs 1, 2, and 3 (wording of 21 September 2010) of Article 21 (wording of 10 April 2003) of the Code of Criminal Procedure, a suspect is a participant in a pre-trial investigation – a person detained on the suspicion that he/she has committed a criminal act, or a person who is being questioned about the act he/she is suspected of having committed, or a person to whom a report of suspicion as provided for in Article 187 of that code has been drawn up and who is summoned to an interrogation, or a person who is in hiding or whose whereabouts are unknown and who is recognised as a suspect by a decision of a prosecutor or by an order of an investigating judge and, in urgent cases, by a ruling of a pre-trial investigation official. According to the legal regulation laid down in paragraph 1 and paragraph 2 (wording of 11 July 2017) of Article 22 of the Code of Criminal Procedure, an accused person is a participant in court proceedings – a person against whom an indictment has been adopted by a prosecutor or a writ has been issued by a prosecutor to punish that person by means of a penalty order, as well as a person against whom an expedited procedure is pending before a court.

8.3.2. Taking into account such a legal regulation laid down in the Criminal Code and the Code of Criminal Procedure, it should be noted that the condition of conviction for a grave, serious, or less serious crime, as established in point 4 of Article 11 of the Law, should be associated with an effective court judgment declaring a person guilty of committing such a crime, and the condition of prosecuting for a grave, serious, or less crime should be associated with the fact that a person is suspected or accused of the commission of such a crime.

8.3.3. Thus, point 4 of Article 11 of the Law establishes two criteria for declaring an investor or persons controlling him/her incompatible with national security interests:

the person has been declared by an effective court judgment guilty of a grave, serious, or less serious crime under the Criminal Code or of a crime under the criminal laws of foreign states which corresponds to the elements of a grave, serious, or less serious crime specified in the Special Part of the Criminal Code, and the conviction for the committed crime has not expired or has not been expunged;

criminal prosecution is carried out against the person for committing a grave, serious, or less serious crime under the Criminal Code or a crime under the criminal laws of foreign states which corresponds to the elements of a grave, serious, or less serious crime specified in the Special Part of the Criminal Code (the person is suspected or accused of committing such a crime).

8.3.4. In this context, it should be noted that, according to paragraph 2 of Article 11, titled “Crime”, of the Criminal Code, crimes are classified as minor, less serious, serious, and very serious ones.

8.4. Summarising the legal regulation laid down in point 4 of Article 11 of the Law and the related legal regulation in connection with the aspect relevant to this constitutional justice case, it should be noted that, according to that legal regulation:

in the light of the objective of the Law (which is enshrined in paragraph 1 of Article 1 and paragraph 7 of Article 2 thereof) – the protection of national security interests, inter alia, the interests of the state and society, by ensuring the protection of objects, inter alia, the economic sectors and enterprises, that are important to national security against all risk factors that could threaten the vital and primary interests of the national security of the state, the development of the trans-European infrastructure and the essential interests of society enshrined in the laws of the Republic of Lithuania, including the provision of the most important services of common interests – point 4 of Article 11 of the Law lays down one of the criteria for assessing an investor’s conformity with national security interests, which is criminal prosecution for committing a grave, serious, or less serious crime;

in the light of the legal regulation laid down in paragraph 2 of Article 2, paragraphs 1 and 7 of Article 10 of the Law, the criterion – criminal prosecution for committing a grave, serious, or less serious crime – set out in point 4 of Article 11 of the Law for assessing an investor’s conformity with national security interests applies to the assessment of both the investor himself/herself and the persons controlling him/her;

in the light of the legal regulation laid down in paragraphs 1, 2, and paragraph 3 (wording of 21 September 2010) of Article 21 (wording of 10 April 2003), paragraph 1 and paragraph 2 (wording of 11 July 2017) of Article 22 of the Code of Criminal Procedure, the criterion – criminal prosecution for committing a grave, serious, or less serious crime – set out in point 4 of Article 11 of the Law for assessing an investor’s conformity with national security interests means that the investor or persons controlling him/her are persons suspected or accused of committing such a crime;

in the light of the legal regulation laid down in paragraph 2 of Article 11 of the Criminal Code, the criterion – criminal prosecution for committing a grave, serious, or less serious crime – set out in point 4 of Article 11 of the Law for assessing an investor’s conformity with national security interests means criminal prosecution for committing intentional (except minor) crimes.

9. In the context of the constitutional justice case at issue, it should be noted that, on 30 June 2020, the Seimas adopted the Republic of Lithuania’s Law Amending Articles 1, 2, 4, 10, 11, 12, 13, 14, 15, 16, 17, 19, 20 of, and Annexes 1, 2, 3, and 4 to, the Law (No IX-1132) on the Protection of Objects of Importance to Ensuring National Security, as well as Supplementing the Law with Articles 131, 171, 191 and Annex 5. Article 5 of that law amended Article 11 of the Law (wording of 12 January 2018). In this context, it should be mentioned that, according to Annex 5 (wording of 30 June 2020) to the Law, that law, inter alia, implements the Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union.

Article 11 (wording of 30 June 2020) of the Law, among others, prescribes:

Article 11. Criteria for the assessment of an investor’s conformity to national security interests

1. An investor shall pose a risk to national security interests or shall not conform to national security interests if:

[…]

(4) he/she has, by an effective court judgment, been found guilty of a grave, serious, or less serious crime under the Criminal Code of the Republic of Lithuania or of a crime under the criminal laws of foreign states which corresponds to the elements of a grave, serious, or less serious crime specified in the Special Part of the Criminal Code and the investor’s conviction for the committed crime has not expired or has not been expunged or criminal prosecution is carried out against that person for committing such a crime;

[…]

2. Where it is established, on the basis of the criteria referred to in points 2, 3, 4, and 10 of paragraph 1 of this Article, that an investor poses a risk to national security, there are grounds for recognising such an investor as posing a risk to national security and, where it is established, in accordance with the criteria referred to in paragraph 1 of this Article, that the investor poses a threat to national security, there are grounds for declaring such an investor incompatible with national security interests.”

A comparison (from the aspect relevant to this constitutional justice case) of the legal regulation laid down in point 4 of paragraph 1 of Article 11 (wording of 30 June 2020) of the Law with that laid down in point 4 of Article 11 of the Law shows that the formulation of point 4 of paragraph 1 of Article 11 (wording of 30 June 2020) of the Law is more precise; in addition, the legal regulation laid down in that point has changed so that, according to it, an investor who is prosecuted for committing a grave, serious, or less serious crime under the Criminal Code or a crime under the criminal laws of foreign states which corresponds to the elements of a grave, serious, or less serious crime specified in the Special Part of the Criminal Code may be declared either incompatible with national security interests or posing a risk to national security.

II

The provisions of the Constitution and the official constitutional doctrine

10. In this constitutional justice case, the Constitutional Court investigates the compliance of point 4 of Article 11 of the Law with paragraph 1 of Article 31 of the Constitution, which consolidates the presumption of innocence.

11. Paragraph 1 of Article 31 of the Constitution prescribes that a person is presumed innocent until proved guilty according to the procedure established by law and declared guilty by an effective court judgment. Interpreting the presumption of innocence, which is ensured in paragraph 1 of Article 31 of the Constitution, the Constitutional Court has noted that, among others, it is a fundamental principle of the administration of justice in criminal proceedings and one of the most important guarantees of human rights and freedoms (inter alia, the rulings of 12 April 2001, 24 February 2017, and 18 April 2019).

11.1. The Constitutional Court has also noted that the provision of paragraph 1 of Article 31 of the Constitution should be assessed in the context of other provisions of the Constitution; therefore, that provision has a broader content and must not be associated with criminal legal relationships only (inter alia, the rulings of 29 December 2004 and 24 February 2017). The presumption of innocence is inseparably linked with respect for and the protection of other constitutional human rights and freedoms, as well as acquired rights (inter alia, the rulings of 7 July 2011 and 18 April 2019). It is especially important that state institutions and officials respect the presumption of innocence and that public persons should in general refrain from referring to a person as a criminal until the said person is proved guilty of committing a crime according to the procedure established by law and declared guilty by an effective court judgment (inter alia, the rulings of 29 December 2004 and 16 January 2007).

11.2. In its ruling of 7 July 2011, when interpreting paragraph 1 of Article 31 of the Constitution, the Constitutional Court stated that the administration of justice, inter alia, the recognition that a person is guilty of committing a criminal act, is an exceptional function of courts; no matter what issues are being decided, no other state institution or official may hold a person guilty of the commission of a criminal act until his/her guilt has been proved in accordance with the procedure laid down by law and has been recognised by an effective court judgement; however, the fact that a person is not held guilty of committing a criminal act until the guilt of the person in committing the said act is proved in accordance with the procedure established by law and recognised by an effective court judgment does not yet mean that a person seeking to hold or holding a position in state service where such a position is linked with the use of classified information and protection thereof necessarily deserves the trust of the state and that a state institution authorised by law may not have certain doubts as to the reliability of that person or his/her loyalty to the State of Lithuania, which would be raised not as a result of the established guilt of the person in committing a criminal act, but by certain factual circumstances, the activity of the person, his/her personal characteristics, reputation, ties, or other significant circumstances, inter alia, the ones relating to a possibly committed criminal act; in assessing the said circumstances, the state institution authorised by law does not administer justice, nor does it judge the person’s guilt in committing a criminal act.

12. Article 46 of the Constitution, which is relevant to this constitutional justice case, prescribes:

The economy of Lithuania shall be based on the right of private ownership, freedom of individual economic activity, and economic initiative.

The State shall support economic efforts and initiative that are useful to society.

The State shall regulate economic activity so that it serves the general welfare of the Nation.

The law shall prohibit the monopolisation of production and the market, and shall protect freedom of fair competition.

The State shall defend the interests of the consumer.”

The Constitutional Court has held on more than one occasion that the principles enshrined in Article 46 of the Constitution form a single whole – the constitutional basis for the economy of this country; therefore, the provisions of all paragraphs of that article are interrelated and supplement one another; there is a balance among the principles enshrined therein, each of those principles must be interpreted without denying the other principles (inter alia, the rulings of 9 May 2014, 5 March 2015, and 18 February 2020); the state, when regulating an economic activity, must follow the principle of the reconciliation of the interests of a person and society and must ensure the interests of both a private person (an entity of economic activity) and society, and must seek the welfare of not individual persons, but precisely the general welfare of the People (inter alia, the rulings of 15 January 2015, 5 March 2015, and 24 May 2018).

The Constitutional Court has also held that the constitutional values on which the national economy is based are closely linked to other constitutional values (inter alia, the rulings of 13 May 2005, 24 May 2018, and 18 February 2020).

12.1. As noted by the Constitutional Court, the provision of paragraph 3 of Article 46 of the Constitution that the state regulates economic activity so that it serves the general welfare of the People implies the duty of the state, as well as of the state institutions implementing state power and other state institutions, when paying regard to the norms and principles of the Constitution and taking account of a situation in the national economy, the variety and changes in the economy and social life, to establish such a legal regulation of the economic activity that would serve the general welfare of the People (inter alia, the rulings of 6 January 2011, 24 May 2013, and 12 April 2018). When interpreting the obligation of the state to seek the general welfare of the People, the Constitutional Court has held that the general welfare of the People is a rather general and broad criterion, whose application may be based on the concept of general welfare, as well as on the arguments of expediency (inter alia, the rulings of 13 February 1997, 13 May 2005, and 16 December 2015); the content of the term “general welfare of the People” is disclosed in each concrete case by taking account of economic, social, and other important factors (inter alia, the rulings of 6 October 1999, 26 January 2004, and 16 December 2015); the welfare of the People may not be understood only in the material (or financial) sense (inter alia, the rulings of 13 February 1997, 21 June 2011, and 16 December 2015).

In interpreting the provision of paragraph 3 of Article 46 of the Constitution that the state regulates economic activity so that it serves the general welfare of the People, it should be noted that this welfare is not possible without the security of the state and society, the assurance of which is a necessary prerequisite for seeking the welfare of the People. In view of this, according to paragraph 3 of Article 46 of the Constitution, the security of the state and society is a constitutionally important objective and public interest, which must be observed by the state when regulating economic activity so that it serves the general welfare of the People.

12.2. The Constitutional Court has noted that, in order to regulate economic activity in such a way that it would serve the general welfare of the People, the state may establish a differentiated legal regulation determined by the specificity of a certain economic activity; the state, when taking account of the specificity of a certain economic activity, may use different measures laid down in a legal regulation (inter alia, the rulings of 2 March 2009, 24 May 2013, and 3 April 2015). The Constitutional Court has also pointed out that the establishment of certain exceptions to a certain general legal regulation may be constitutionally justified if these exceptions are aimed at ensuring a constitutionally justifiable and universally important interest, and only to the extent to which this is sought; the said exceptions must be proportional to the constitutionally justifiable objective sought and must not limit the rights of the subjects concerned more than necessary to ensure the said constitutionally justifiable and universally significant interest (inter alia, the rulings of 12 December 2005, 24 May 2013, and 3 April 2015).

In the context of the constitutional justice case at issue, it should be noted that, under paragraph 3 of Article 46 of the Constitution, in regulating the economic activity so that it would serve the general welfare of the People, inter alia, in order to ensure the security of the state and society, the legislature must establish a special legal regulation for economic sectors important for the security of the state and society (entities or objects of economic activities), inter alia, special requirements (conditions) for economic activities in order to avoid a threat to the security of the state or society. When establishing such a legal regulation, the legislature may provide for the screening (on the basis of the criteria for assessing the risk posed to the security of the state and society) of persons seeking to carry out economic activities in economic sectors important to the security of the state and society, inter alia, the criteria that would prevent in advance threats to the security of the state or society in certain economic sectors.

In the context of this constitutional justice case, it should also noted that holding criminally liable a person seeking to carry out economic activities in economic sectors important to the security of the state and society, inter alia, filing suspicions or charges against a person on behalf of the state for the commission of certain crimes or the conviction of a person for certain crimes, may be considered a circumstance implying the vulnerability of such a person and thus, at the same time, able to pose a threat to the interests of the security of the state and society in a particular economic sector.

Thus, when establishing, under paragraph 3 of Article 46 of the Constitution, a special legal regulation for economic sectors (entities or objects of economic activities) important for the security of the state and society, it is allowed to impose the condition that persons seeking to carry out economic activities in economic sectors (enterprises) important to the security of the state and society are not subject to prosecution for certain crimes, inter alia, they are not subject to suspicion or charges on behalf of the state. It should be noted in connection with the aspect relevant to this constitutional justice case that such a condition does not in itself violate the presumption of innocence, which is consolidated in paragraph 1 of Article 31 of the Constitution, since the screening (on the basis of the criteria for assessing the risk posed to the security of the state and society) of persons seeking to carry out economic activities in economic sectors important to the security of the state and society is not the administration of justice and does not decide the issue of the guilt of a person in committing a criminal act. It should be stressed that the fact that a person is not held guilty of the commission of a certain crime until his/her guilt for such a crime has been proved in accordance with the procedure laid down by law and has been recognised by an effective court judgement does not yet mean that holding the person criminally liable in respect of such a crime, inter alia, certain factual circumstances related to that crime, may not give rise to doubts regarding possible threats to the security of the state and society in a certain economic sector, i.e. to the interests (protected under Paragraph 3 of Article 46 of the Constitution) of the welfare of the People.

III

The assessment of the compliance of point 4 of Article 11 of the Law with the Constitution

13. In this constitutional justice case, the compliance of point 4 of Article 11 of the Law with paragraph 1 of Article 31 of the Constitution is impugned.

14. As mentioned before, the legal regulation laid down in point 4 of Article 11 of the Law was amended when the Seimas adopted, on 30 June 2020, the Republic of Lithuania’s Law Amending Articles 1, 2, 4, 10, 11, 12, 13, 14, 15, 16, 17, 19, 20 of, and Annexes 1, 2, 3, and 4 to, the Law (No IX-1132) on the Protection of Objects of Importance to Ensuring National Security, as well as Supplementing the Law with Articles 131, 171, 191 and Annex 5. Paragraph 4 (wording of 11 July 1996) of Article 69 of the Law on the Constitutional Court provides that the annulment of an impugned legal act constitutes the grounds for adopting a decision to dismiss the instituted legal proceedings. The Constitutional Court has held that the same could also be said as regards the cases when the impugned legal act (or part thereof) was not repealed, but the legal regulation established therein was changed (inter alia, the rulings of 31 January 2011, 10 December 2012, and 25 November 2019).

However, the Constitutional Court has also held that, in cases where a person referred to in Paragraph 4 of Article 106 of the Constitution, after having exhausted all legal remedies and in accordance with the other conditions established in the Law on the Constitutional Court, applies to the Constitutional Court, requesting it to investigate whether a law (or part thereof) or another legal act (or part thereof) is in compliance with the Constitution (or another higher-ranking act) if a decision adopted on the basis of that law (or part thereof) or another legal act (or part thereof) has possibly violated the constitutional rights or freedoms of the person, the Constitutional Court has the duty to examine the petition of that person, irrespective of whether or not the impugned law or another legal act is in force at the time of considering the respective constitutional justice case (ruling of 25 November 2019).

Taking account of the fact that the petitioners in this constitutional justice case are the persons specified in paragraph 4 (wording of 21 March 2019) of Article 106 of the Constitution, the Constitutional Court will investigate in this case whether point 4 of Article 11 of the Law, insofar as, according to the petitioners, that point provides that a person is recognised as not complying with national security interests if he/she is accused of committing a grave, serious, or less serious crime, although there is no effective court judgment convicting that person, was in conflict with paragraph 4 of Article 106 of the Constitution.

15. The petitioners maintain that, according to the legal regulation laid down in point 4 of Article 11 of the Law, state authorities are granted the right to hold a person de facto guilty solely by reason of criminal prosecution carried out against that person and to impose on him/her measures of a negative nature, thus limiting the civil rights of that person; the long-term negative consequences are felt not only by the person against whom such prosecution is conducted, but also by other persons, who may not even be aware of the fact of the criminal prosecution or, in particular, of the circumstances surrounding it.

16. In this ruling of the Constitutional Court, it has been mentioned that the presumption of innocence, which is ensured in paragraph 1 of Article 31 of the Constitution, must not be associated with criminal legal relationships only; no state institution or official may hold a person guilty of the commission of a criminal act until his/her guilt has been proved in accordance with the procedure laid down by law and has been recognised by an effective court judgement.

It should be noted in connection with the aspect relevant to this constitutional justice case that, as mentioned before, according to paragraph 3 of Article 46 of the Constitution:

the security of the state and society is a constitutionally important objective and public interest, which must be observed by the state when regulating economic activity so that it serves the general welfare of the People;

the legislature must establish special requirements (conditions) for economic activities in order to avoid a threat to the security of the state or society; when establishing such a legal regulation, the legislature may provide for the screening (on the basis of the criteria for assessing the risk posed to the security of the state and society) of persons seeking to carry out economic activities in economic sectors important to the security of the state and society, inter alia, the criteria that would prevent in advance threats to the security of the state or society in certain economic sectors; when establishing such a legal regulation, the condition may be imposed that such persons are not subject to prosecution for certain crimes, inter alia, that they are not subject to suspicion or charges on behalf of the state for such crimes;

holding criminally liable a person seeking to carry out economic activities in economic sectors important to the security of the state and society for the commission of certain crimes may be considered a circumstance implying the vulnerability of such a person and thus, at the same time, able to pose a threat to the interests of the security of the state and society in a particular economic sector; the condition that such persons are not held criminally liable for certain crimes does not in itself violate the presumption of innocence, which is enshrined in paragraph 1 of Article 31 of the Constitution, since the screening of such persons on the basis of the criteria for assessing the risk posed to the security of the state and society is not the administration of justice and does not decide the issue of the guilt of a person in committing a criminal act.

17. Summarising the legal regulation laid down in paragraph 4 of Article 11 of the Law and the related legal regulation, it has been noted that:

in the light of the objective of the Law (which is enshrined in paragraph 1 of Article 1 and paragraph 7 of Article 2 thereof) – the protection of national security interests, inter alia, the interests of the state and society, by ensuring the protection of objects, inter alia, the economic sectors and enterprises, that are important to national security against all risk factors that could threaten the vital and primary interests of the national security of the state, the development of the trans-European infrastructure and the essential interests of society enshrined in the laws of the Republic of Lithuania, including the provision of the most important services of common interests – point 4 of Article 11 of the Law lays down one of the criteria for assessing an investor’s conformity with national security interests, which is criminal prosecution for committing a grave, serious, or less serious crime;

in the light of the legal regulation laid down in paragraph 2 of Article 2, paragraphs 1 and 7 of Article 10 of the Law, the criterion – criminal prosecution for committing a grave, serious, or less serious crime – set out in point 4 of Article 11 of the Law for assessing an investor’s conformity with national security interests applies to the assessment of both the investor himself/herself and the persons controlling him/her;

in the light of the legal regulation laid down in paragraphs 1, 2, and paragraph 3 (wording of 21 September 2010) of Article 21 (wording of 10 April 2003), paragraph 1 and paragraph 2 (wording of 11 July 2017) of Article 22 of the Code of Criminal Procedure, the criterion – criminal prosecution for committing a grave, serious, or less serious crime – set out in point 4 of Article 11 of the Law for assessing an investor’s conformity with national security interests means that the investor or persons controlling him/her are persons suspected or accused for committing such a crime;

in the light of the legal regulation laid down in paragraph 2 of Article 11 of the Criminal Code, the criterion – criminal prosecution for committing a grave, serious, or less serious crime – set out in point 4 of Article 11 of the Law for assessing an investor’s conformity with national security interests means criminal prosecution for committing intentional (except minor) crimes.

18. Thus, it should be noted in connection with the aspect relevant to this case that, in order to achieve the constitutionally important objective of protecting the interests of the security of the state and society when regulating economic activity, the impugned point 4 of Article 11 of the Law established the criterion – criminal prosecution, i.e. where a person is suspected or accused of committing an intentional (except for a minor) crime – for assessing the risk posed to the security of the state and society by persons, i.e. investors and persons controlling them, seeking to carry out economic activities in economic sectors (or enterprises) important to the security of the state and society.

It should be held that such a legal regulation is aimed at preventing in advance threats in economic sectors important to the security of the state and society, where those threats arise due to persons’ vulnerability relating to their criminal prosecution, inter alia, suspicions or charges filed against them on behalf of the state for the commission of certain crimes.

Thus, viewed from the aspect impugned by the petitioners, the legal regulation laid down in point 4 of Article 11 of the Law should be assessed as implementing the duty of the legislature under paragraph 3 of Article 46 of the Constitution to regulate economic activity in such a way that it serves the welfare of the People, by setting special requirements (conditions) for economic activities in order to avoid a threat to the security of the state and society and, thus, as not violating in itself the presumption of innocence, which is consolidated in paragraph 1 of Article 31 of the Constitution. As mentioned before, the screening (on the basis of the criteria for assessing the risk posed to the security of the state and society) of persons seeking to carry out economic activities in economic sectors important to the security of the state and society is not the administration of justice and does not decide the issue of a person’s guilt in committing a criminal act.

19. In view of the foregoing arguments, the conclusion should be drawn that point 4 of Article 11 of the Law, insofar as, according to that item, criminal prosecution against an investor for committing a grave, serious, or less serious crime under the Criminal Code or for committing a crime under criminal laws of foreign states that corresponds to the elements of a grave, serious, or less serious crime specified in the Special Part of the Criminal Code, constitutes grounds for declaring the investor incompatible with national security interests, was not in conflict with paragraph 1 of Article 31 of the Constitution.

Conforming to Articles 102 and 105 of the Constitution of the Republic of Lithuania and Articles 1, 53, 531, 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:

To recognise that point 4 of Article 11 of the Republic of Lithuania’s Law on the Protection of Objects of Importance to Ensuring National Security (wording of 12 January 2018; the Register of Legal Acts, 23-01-2018, No 1004, identification code 2018-01004), insofar as, according to that item, criminal prosecution against an investor for committing a grave, serious, or less serious crime under the Criminal Code of the Republic of Lithuania or for committing a crime under criminal laws of foreign states that corresponds to the elements of a grave, serious, or less serious crime specified in the Special Part of the Criminal Code of the Republic of Lithuania, constitutes grounds for declaring the investor incompatible with national security interests, was not in conflict with the Constitution of the Republic of Lithuania.

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

Justices of the Constitutional Court: Elvyra Baltutytė
                                                                     
Gintaras Goda
                                                                     
Vytautas Greičius
                                                                     
Danutė Jočienė
                                                                     
Giedrė Lastauskienė
                                                                     
Algis Norkūnas
                                                                      Daiva Petrylaitė
                                                                     
Dainius Žalimas