The Composition of the Chamber:

Nikoloz Shashkini – the chairman of the hearing

Lamara Chorgolashvili – Rapporteur Judge

Zaur Jinjolava – Member.

The Secretary of the Hearing: Elene Lagidze

Title of the case: Georgian Young Lawyers Association v. The Parliament of Georgia

The subject of the dispute: Constitutionality of the words “state entities’...” of art.165(1) of the Customs Code of Georgia with respect to art.24 and art.41 of the Constitution.

Participants of the Hearing: Claimants, the representatives of Georgian Young Lawyers Association - Mrs. Tamar Kordzaia and Mrs. Nino Lomjaria. Respondents, the representatives of the Parliament of Georgia - Mr. Batar Chankseliani, Mrs. Salome Mezvrishvili and Mr. Joseb Lomashvili.

On 10^th of February 2006, Georgian Young Lawyers Association submitted the constitutional claim to the Constitutional Court of Georgia and requested recognition of art.165 (1) of the Customs Code of Georgia as unconstitutional with respect to art. 24 and art. 41 of the Constitution of Georgia.

The grounds for submission of the constitutional claim are art.45, art.89 (1) (f) of the Constitution of Georgia, art.19 (1)(e), art.39 (1)(a) of the Organic Law on the Constitutional Court and art.1(2), art.16 of the Law on Constitutional Proceedings.

The claimant states that pursuant to N52 ordinance of the President of Georgia of 14^th February 2005, the amount of 451 210 GEL has been transferred from the reserve fund of the President of Georgia to the Interior Ministry for customs clearance of a cargo received on the basis of contracts with foreign firms. On 15^th of April of 2005 Georgian Young Lawyers Association, with the intention of receiving public information, has applied to the Customs Department of the Ministry of Finance and requested copies of customs documents filled in for the cargo which was cleared by the amount received from the reserve fund. They were refused on the grounds of art.165 of the Customs Code of Georgia

The refusal of the Customs Department to disclose information was appealed by the claimant in the district administrative court, but the court by the judgment of 26th July 2005, has not upheld the claim on the grounds of art.27²(1) of the General Administrative Code, which defines information belonging to commercial secret.

The claimant thinks that the argumentation of the court is not comprehensive and is incompatible with the rights enshrined in art.24 and art.41 of the Constitution of Georgia as it violates the right to receive information.

The claimant thinks, that the court has not considered that acknowledgement of activity exercised by a state entity as a commercial secret is incompatible with the requirements of art.27²(2) of the General Administrative Code of Georgia, pursuant to which : “ Information regarding an administrative body does not constitute a commercial secret”.

In claimant’s opinion, the disputed act violates the right of citizens and legal entities enshrined in the Constitution of Georgia to receive and impart information freely.

A violation of art.24 (1) of the Constitution of Georgia requires proper justification, as the article guarantees free receipt of information from the generally accessible sources. All bodies, possessing information, constitute such accessible source, which shall be applied to by the interested parties and through positive action receive the necessary information.

The claimant thinks that the limits established by the disputed act, in accordance to which certain information is regarded a priori as a commercial secret, narrow the scope of the constitutional rights and constitute disregard by the state of the rights enshrined in the Constitution.

In accordance with the explanation of the claimant, art.24 of the Constitution defines specific criteria for restriction of the right to the freedom of information, while the restriction established by the Code of Georgia on Customs does not conform to any of the criteria established by the Constitution. The state entity, as a budgetary body is financed from tax payments of citizens and this creates an accountability of a public entity towards the citizens. Thus, the claimant thinks, that a public body being in the service of a society cannot be granted a right to make certain information secret as this is in fundamental conflict with the principle of democracy.

The claimant thinks, that the disputed norm is also incompatible with art.41 of the Constitution of Georgia which defines conditions for receiving information from the state entities: “Every citizen has the right according to the law to know information about himself which exists in state institutions as long as they do not contain state, professional or commercial secrets, as well as official records existing there”.

The claimant mentions, that a certain information, acknowledged as a commercial secret by a public body, should satisfy the definition of a commercial secret provided by art.27² of the General Administrative Code of Georgia, pursuant to which: “ a commercial secret – information about the plan, process, formula, means or any other information having commercial value, which is used for production, preparation, work or for providing service and/or which constitutes the news or result of technical creativity, as well as other information, disclosure of which can harm competitiveness of the individual”.

The information sent by the state body to the customs department cannot constitute a commercial secret, as the state body does not and may not exercise commercial activities, because the main purpose of their activity is not to receive profit but to realize state tasks and public functions. Therefore the claimant thinks, that it is impossible for the state to possess information, which constitutes a commercial secret for it.

The claimant thinks that acknowledgement of information, sent by the state entity to the customs department, as commercial secret pursuant to art.165 of the Customs Code of Georgia, is in conflict with the requirements established by art.41 of the Constitution.

The claimant stated that, in accordance with the first sentence of art.6 (2) of the Constitution “the legislation of Georgia corresponds to universally recognised norms and principles of international law”, which means that while interpreting art.24, art. 41 of the Constitution and legal acts adopted on the basis of these articles, the court should take into account relevant standards which legislation has set to contracting parties regarding realization of right to freedom of information.

The claimant pointed to the standards set by the European Court of Human Rights for interpretation of art.10 of the Convention. The claimant stated that art.10 of the convention analogically to art.24 (2) of the Constitution of Georgia establishes certain restrictions on the freedom of information.

The claimant pointed to the judgment (Autronic AG v. Switzerland, 22 May 1990, Series A N178), in which the court established that interference in the freedoms enshrined in art.10 of the European Convention should be subject to strict control.

In the claimant’s opinion, acknowledgement of the information on the basis of the disputed art.165 as a commercial secret, which by its content does not constitute a commercial secret in accordance with art.27²(2) of the General Administrative Code of Georgia is a serious violation of the rights enshrined in art.24 and 41 of the Constitution of Georgia.

On the basis of all the above mentioned, the claimant – Georgian Young Lawyers Association requests recognition of the words “state entities’..” of the art.165(1) of the Customs Code of Georgia as unconstitutional with respect to art.24 and art.41 of the Constitution of Georgia.

The respondent party – representatives of the Parliament of Georgia: Mr. Batar Chankseliani, Mrs. Salome Mezvrishvili and Joseph Lomashvili think that the disputed norm is not in conflict with the Constitution of Georgia

The respondent thinks that the claimant incorrectly interprets the law. The freedom of information is indeed one of the most significant rights which an individual has. However, this right is not absolute and allows the state to restrict it in certain cases in accordance with the law. The reflection of this restriction is acknowledgement of information either as a commercial, state or private secret.

The respondent explains, that although it is true that the Georgian legislation grants to an individual or legal entity the right to receive any kind of information which is not deemed as confidential, but along this the law requires adherence to another rule – the application to receive an information should be lodged to the administrative body, which is empowered to disclose such an information. The claimants in the present case have applied not to the reserve fund of the President or to the Ministry of Interior, but to the Customs Department which has cleared the mentioned cargo. In this case, the Customs Department justifiably refused to disclose information to the Georgian Young Lawyers Association as it was not empowered to impart that information.

The respondent thinks that acknowledgement of information as a commercial secret by one public entity does not automatically mean that the same information is a commercial secret as well as for another public organization.

In the respondent’s opinion, the claimants’ statement that “acknowledgement of information, sent by the state entity to the customs department, as commercial secret is deprived of any reasonableness in the democratic society” is too radical. Art.24 (4) of the Constitution of Georgia states that disclosure of information shall be restricted for prevention of disclosure of confidential information. The Customs Code of Georgia has acknowledged as a commercial secret the information sent to the Customs Department. Thus the disputed norm is compatible with art. 24(4) of the Constitution.

The representative of the respondent explains that pursuant to the Customs Code, the customs bodies of Georgia exercise their activities as entities having law enforcement status. In other words, customs bodies have law enforcement status, where wide range of information is collected and they are responsible for protection of this information. At the same time, this information does not relate directly to customs bodies, but represents the information of third parties. Therefore, the disputed act is in full conformance with the Constitution.

The representative of the respondent thinks that although it is true that exercising entrepreneurial activity or receiving profit is not the function of a state, this does not mean that the state may not be a party to a commercial relation in certain cases. In such a case, the information may include some commercial data, disclosure of which may result in irreversible harm not only to the state’s economy but to its security as well. At the same time, information deemed as a commercial secret by the customs body can be public for another state body.

The representative of the respondent explains that customs document includes detailed information not only regarding purchase of goods or services but as well as a name, address, contract amount and other information about a supplier, which constitutes a commercial secret for a supplier organization. Therefore, the claimant’s opinion that the words “state entities’…” of the art.165 (1) of the Code of Georgia on Customs violates the right to freedom of information is unfounded.

At the same time, the representative of the respondent thinks that the claimant’s explanation that the state cannot lead an entrepreneurial activity and receive profit is incorrect. The respondent does not agree with this position and to support his argument provides Freedom of Information Act 2000 of UK and N5 guidelines developed by the Freedom of Information Commissioner of UK, on the basis of which the representative of the respondent thinks that it is possible that the state be involved in commercial activity and thus have commercial interests and related commercial secrets.

The representatives of the respondent consider reasons, because of which state bodies have right to possess commercial information, namely purchases, regulation, commercial activities of state bodies, development of state policy, implementation of state policy and private financial initiative/private public partnership.

The representatives of the respondent do not agree with the opinions of the claimants regarding that the information transferred to the customs body constitutes information about this administrative body, because it is connected with the activity of this organization and is not directly related to it. Therefore, art.27² (2) of the General Administrative Code of Georgia, according to which “information regarding the administrative body does not constitute commercial secret”, shall not be applied to this category of information.

In relation to the disputed issue, the representatives of the Parliament provide as an example legislation of Russia, where the obligation of a custom body to disclose information is regulated analogically.

Pursuant to art.16 of the Code on Customs of the Russian Federation, the information which is sent to customs bodies by state institutions, companies, organizations and citizens shall be utilized only for the purpose of customs activities. Furthermore, information that constitutes state, commercial, banking or other legally protected secret (information that is not publicly accessible and disclosure of which may result in serious harm to the provider of the information) shall not be disclosed, used by customs officials for the purposes not connected with their work, transferred to third parties or to state bodies. The exceptions are those cases, which are defined by the law.

Therefore, in the opinion of the representatives of the respondent, the Russian legislation also prohibits customs bodies to disclose secret information, which was provided to them by private as well as by state organizations. The law makes the information provided to the customs bodies strictly secret.

On the basis of all above mentioned, the representatives of the Parliament think that the constitutional claim N358 submitted by Georgian Young Lawyers Association, the subject of the dispute of which is unconstitutionality of the words “ state entities’..” of art.165(1) of the Customs Code of Georgia with respect to art. 24 and art.41 of the Constitution of Georgia, is unfounded and should be dismissed.

According to the explanation provided by the invited expert on the case - Mr. Vaja Xidasheli, Head of Legal Unit at Customs department, art.41 of the Constitution of Georgia does not define the criteria on the basis of which certain information shall be attributed to a commercial secret. This is outside of the regulatory scope of the norm. Therefore, basing arguments on this norm, in a formal sense would be incorrect. Art. 41(2) establishes guarantee that all other information that is not connected to certain issues, may be disclosed only by the permission of a relevant person. While interpreting this norm the witness points to the European Convention for protection of Human Rights and Freedoms, in which the right to access information is guaranteed. According to the testimony of the witness, the receipt of information from the state is a matter of interpretation. The European Court emphasizes that freedom of information includes firstly non-interference by the state in the matter of access to information and does not include presumption related to administrative body.

Apart from this, the witness stated that the information transferred to customs bodies, which constitutes a commercial secret, should be narrowly defined. In particular, this is information that is given to customs bodies through declaration filled during clearance by the third parties and not other information, which relates to other sphere of activity of customs bodies, disclosure of which is regulated by other provisions of General Administrative Code.

According to explanation of the representative of the Customs Department, the state bodies, as a rule, do not exercise commercial activities, but if commercial activity involves purchase and sale operations, then the state is a party to an economic activity.

According to the statement of invited specialist on the case – Mrs. Irma Kharshiladze, Associate Professor of administrative law and procedure at I. Javakshivili Tbilisi State University:

1. Art. 27²(2) contains requirement that “information regarding the administrative body does not constitute commercial secret”. This is related to an administrative activity. Administrative bodies exercise public function. They may carry on an economic but not a commercial activity, the purpose of which is receiving a profit.

2. Concerning such concepts as - “administrative body” and “state body”, the specialist explains that the concept of the former is wider than that of the latter. The administrative body includes not only state bodies but also local self-government bodies, public legal entity and other organizations that exercise public law functions on the basis of legislation.

3. In the opinion of the specialist, art.165 (1) of the Customs Code of Georgia necessitates correction, because any information given by individuals, legal entities or state institutions to customs bodies may not constitute a commercial secret. This is true especially in relation to a state body.
What concerns the request of information by Georgian Young Lawyers Association from Customs Department, on the basis of operative legislation, the Customs Department is not empowered to satisfy the request (see art.165 (1) of the Code of Georgia on Customs), but it was obliged to inform to the interested party about the refusal and provide Young Lawyers Association with a written explanation of its rights and appeal procedure within 3 days period. In the opinion of the specialist, the Georgian Young Lawyers Association should have applied with the request of the information to the Ministry of Interior, which could have disclosed any information regarding the use of 451 210 GEL as discharged from the President’s fund.

The second Chamber of the Constitutional Court on the basis of the materials attached to the constitutional claim, testimony of the witness, written submissions of the specialist established the following circumstances for the judgment.

The Georgian Young Lawyers Association requests to recognize as unconstitutional those words of the first section of the Customs Code of Georgia, which attribute information given by state organizations on the basis of this code and other relevant legislation to the Customs Department to the commercial secret. The claimant argues that this information is not included in the list of art. 24(4) of the Constitution, which establishes possible restrictions to freedom of information and also is incompatible with art.41 of the Constitution, which guarantees free access to the information held in the state organizations. The claimant points to the incompatibility of the disputed act with art. 27²(1) of the General Administrative Code of Georgia, which defines the concept of a commercial secret, and also to the second paragraph of the same article, pursuant to which “ information regarding the administrative body does not constitute a commercial secret.” In his opinion, a state organization cannot carry on commercial activity and it cannot hold information containing a commercial secret. Restriction should be necessary in the democratic society, which is not confirmed by the respondent.

The Constitutional Court states:

1. Freedom of expression without interference by the state, regarding receiving or distributing information is acknowledged by the art. 10 of the European Convention for Protection of Fundamental Rights and Freedoms. Freedom of expression is one of the fundaments of a democratic society and precondition of progress and self-realization of an individual. The mentioned right creates an obligation of a state to make accessible information of social interest within the reasonable limitations. The second paragraph of the mentioned article of the European Convention for the Protection of Human Rights and Freedoms includes possible restrictions on the right. Any contracting party is empowered to interfere in the freedom of expression if the following three conditions are adhered to: a. interference is prescribed by the law; b. interference intends to realize one or more interests mentioned in the article; c. interference is necessary in the democratic society.

The mentioned provisions are reflected in the art. 24 of the Constitution of Georgia. On the basis of the above mentioned the court thinks that freedom of information is not an absolute right and may be restricted in accordance with public interest. How justifiable is interference with the freedom of expression from the state should be decided on a case-by-case basis.

To what degree the right to access information places government under obligation to disclose certain information is dependent upon the assessment of the Court. The European Court of Human Right in the Leander case stated that “the right to freedom to receive information basically prohibits a Government from restricting a person from receiving information that others wish or may be willing to impart to him." However, the court also states that on the basis of the circumstances of the present case, art.10 of the European Convention on Human Rights does not grant to an applicant a right to receive information, held in a secret register of the police, and state has no obligation to make such information accessible to individuals.

The claimant could not substantiate that the state interference in the given case is incompatible with certain social interest, which would have been weighed by the realization of freedom of expression enshrined in the European Convention and in the Constitution of Georgia.

2. The definition of art.165(1) of the Customs Code of Georgia does not include imperative prohibition on disclosure of the information given to the customs bodies, because the mentioned norm may be applied on the basis of art.122 of the Tax Code of Georgia. The court thinks that the disputed norm includes two ways in which information maybe accessible. Firstly, the information may be disclosed to persons defined in the second paragraph of the above mentioned article of the Tax Code, including the court. Apart from this, the disputed norm points to a commercial secret character of the information given by a state organization to customs body and therefore, it is meant that the information is a property of the state organization and not of customs bodies’. Thus it is up to the state organizations to decide whether the information is a secret one and its disclosure must be only within the powers of this organization. The acknowledgement of the state organizations’ information as a commercial secret may be appealed in the court on the basis of art 27²(4) of the General Administrative Code of Georgia.

On the basis of the above mentioned, as art.24 and art.41 of the Constitution of Georgia do not include any restrictive norm and state interference in the freedom of expression is permissible and also the disputed norm includes alternative ways of access to information, the court thinks that the words “state entities’...” of art.165(1) of the Code of Georgia on Customs do not include any incompatible provision with respect to the above mentioned articles of the Constitution of Georgia.

The court does not agree with the claimant’s and the invited specialist’s opinion, that the customs department was obliged on the basis of art.80 of the General Administrative Code of Georgia to send the materials to a relevant administrative body, which it has not accomplished. In the Court’s opinion, consideration of the issue of application of a legal norm is not within the competence of the court.

The necessity to apply to the state organization in order to receive information is also acknowledged by the specialist in his written submission.

3. The constitutional claim is mainly based on presumption of art.165 that information held in a state organization is related to a commercial activity, whereas state organizations exercise public functions and do not have competency of leading a commercial activity and receiving a profit.

The Constitutional Court cannot agree with this opinion. Pursuant to art.41 (1) of the Constitution of Georgia, each citizen has a right to receive information held in state organizations about him/her, if it does not contain state, professional or commercial secret. Therefore, the Constitution allows that a commercial secret be held by a state organization.

Pursuant to art.8 of the Civil Code of Georgia, it is permissible that state organizations or public legal entities be in private legal relations with other legal persons. These relations are regulated by the civil law except if these should not be regulated by the public law in accordance with state or social interests.

The range of state legislations contains provision about the state’s commercial activities. In England it is allowed that the state be involved in purchase – sale relations and, therefore, be a party in commercial activity. Similarly Civil Code of Georgia (as was mentioned above) permits state’s participation in private legal relations. Apart form this, a profit is not the necessary element of a commercial activity, in other words the price for a certain product or service may not be solely for receiving profit.

It is stated in the Freedom of Information Act of the United Kingdom that commercial information may be in the possession of state organizations. Pursuant to art.43 of this act “Information should be regarded as protected one, if its disclosure would harm commercial interests of any person (including the state).”

In accordance with art.16 of the Customs Code of Russian Federation, information which is given to customs bodies by state organizations shall be used only for the purposes of customs activity.

4. The Constitutional Court takes into account also the fact that realization of customs policies is within the exclusive powers of the highest state bodies ( art.3(f) of the Constitution of Georgia, art.1(4) of the Customs Code of Georgia) and is directed towards the development and maintenance of the international economic integration. Therefore the Constitutional Court thinks it is correct that the information given to customs bodies is made secret. The norms of the Customs Code of Georgia also consider the interest of contracting parties and also the obligation of the state to protect suppliers’ interests. The information given to the customs bodies includes mainly customs documents which contain detailed information not only about goods or service but also information about supplier, disclosure of which may result in infringement of third parties’ interests. Otherwise there would have been breach of others’ rights and freedoms stated in art.24 (4) of the Constitution of Georgia.

5. The Constitutional claim is based and substantiated by art.27² (2) of the General Administrative Code of Georgia, pursuant to which “information about an administrative body does not constitute a commercial secret” and which considers that the disputed act is in conflict with this norm. Examination of conflicts between the norms of the legal acts is not within the competence of the Constitutional Court of Georgia; apart from this, claimant defines “information about an administrative body” too widely. In the opinion of the Court, this concept includes information only directly related to the administrative body and the wording of the norm does not contain any indication about all the spheres of its activity, therefore the Court cannot agree with the opinion expressed by the invited specialist on this issue.

On the basis of the all above mentioned, in accordance with art.89(1)(f) of the Constitution of Georgia, art.19(1)(d), art.21(2), art.39(1)(a), art.39(2), 2^nd,3^rd,4^th,7^th and 8^th paragraphs of art.43 of the organic law on the Constitutional Court as well as art.32 and art.33 of the Law on Constitutional Proceedings

The Chamber of the Constitutional Court
RULES:

The constitutional claim of Georgian Young Lawyers Association v. The Parliament of Georgia about the constitutionality of the words “state entities’…” of art.165 (1) of the Customs Code of Georgia with respect to art.24 and art.41 of the Constitution of Georgia shall be dismissed.

This judgment is operative from the moment of its public announcement on the hearing of the Constitutional Court;

The judgment is final and is not subject to appeal or review.

The judgment shall be sent to the parties: to the President of Georgia, to the Government of Georgia, to the Parliament of Georgia and to the Supreme Court of Georgia;

The judgment shall be published within 7 days time in the Legislative Bulletin of Georgia.

Members of the Chamber:

Mr. Nikoloz Cherkezishvili

Mrs. Lamara Chorgolashvili

Mr. Zaur Jinjolava