Tuesday, February 11th , the Strasbourg court decided that in the case of the lithuanian citizen Gintaras Ziaunys, who in 2001 has been seized by Moldovan customs of 353 bags with transnistrian rubles that he wanted to transport from Transnistrian region to the United States of America, have been violated his right to property. ECHR obliged the government in Chisinau to pay the sum of 5000 euros for moral damages and 1900 euros for trial costs. “This decision is not final. From the first analys that we did, the Strasbourg Court has not revealed many aspects” says Lilian Apostol, Moldovan government agent ECHR.
In 2000, lithuanian Gintaras Ziaunys, member of some international organizations studying coins and old medals, has signed a contract with the American company Educational Coin Co.., Inc., specialized in collecting and trading notes and some old items, to which he was to deliver 8.5 kg of banknotes issued by the Transnistrian republican bank. In 2001, he bought from the Transnistrian Republican Bank about 13.6 million rubles, put into circulation in 1994, which were subsequently replaced with new banknotes in 2000. Such notes were never, officially, put into circulation on the territory of Moldova, not being recognized as an official currency by any state in the world. Thus these banknotes were circulating only in Transnistria before 2000.
On February 1, 2001, Gintaras Ziaunys tried to cross the border of Moldova with 353 sealed bags with transnistrian banknotes. He requested permission to deliver rubles to the United States, in accordance with the contract concluded with the American company. Ziaunys said the papers from bags would have a numismatic value of 7000 USD. Customs authorities have decided to keep the bags in there warehouse, later the bags were moved to the offices of the State Tax Inspectorate. By decision from 23rd of July 2003 and a report from 25th of August 2003 the Moldovan Customs Service has decided not to return the notes to the applicant and submit them to the IRS.
So, Lithuanian citizen initiated several legal proceedings on the annulment of the decision from 23rd of July 2003 and the return of his property. In 2005 the Court of Appeal Chisinau upheld the application of Gintaras Ziaunys noting that these banknotes were not entered into general circulation in Moldova and have never been changed into the country’s official currency. There was no evidence that the notes were made for circulation in Moldova. Then Gintaras Ziaunys officialy declared 353 sacks of banknotes to be shipped abroad. Furthermore, it was assumed that he obtained them legally, until proven otherwise.
Supreme Court rejected Lithuanian requirements
By decision of the Supreme Court (SC) from 17th of May 2006 the first decision was canceled and adopted a new one, on rejecting the requirements. The court found that only the NBM has the right to issue banknotes and that Transnistria bank does not have this right.
Also in 2006 Ziaunys complained to the Strasbourg Court, alleging that his right of ownership of banknotes has been violated. Tuesday, February 11, 2014, the ECHR held unanimously that there had been a violation of Article 1 of Protocol nr.1 of the European Convention on Human Rights, the right to property. This is because there was no evidence that Gintaras Ziaunys intended to put into circulation these banknotes, which were not accepted as payment anywhere in the world, except in transnistrian region. Moreover, he had a contract for transferring the banknotes to a numismatic company.
According to the Supreme Court decision from 2006, in Moldova, only the NBM has the right to issue banknotes. So that, the banknotes issued by other entities, are illegal and can not be part of a legal circuit. Strasbourg Court took note of the Government’s argument that the issuance and circulation of banknotes in Moldova by an entity other than the NBM is contrary to several legal requirements. It reiterated that the applicant was never accused of issuing banknotes and there is no evidence of tentative of puting in circulation those banknotes. He officialy declared the banknotes to authorities and explicitly stated their numismatic value and destination. Moreover, these banknotes could not be in circulation in 2001. So the legislation invoked by the Supreme Court of Justice and Government on the circulation of banknotes could not serve as the basis for the seizure.
ECHR judges pointed out that none of the provisions from those invoked by the Supreme Court regulate the banknotes sequestration. And according to art.206 Civil Code, the contract that Gintaras Ziaunys concluded with the American company could be invalidated for lack of a legitimate object, according to art. 219 Civil Code, the effect of agreement avoidance is that the parties return their contributions. This would mean returning banknotes to applicant, to be returned to the issuing bank. Even assuming that the criminal or administrative law provides seizure of illegal goods, were not instituted criminal or administrative proceedings against the applicant.
At the Strasbourg Court, Gintaras Ziaunys requested 12,220 euros for material damage and 20,000 euros for moral damages. Finally, the Court offered 5,000 euros for moral damage and 1,900 euros for material damage.
Bags with rubles were destroyed
Lilian Apostol, Moldovan government agent at ECHR told us that, in this case, the government’s main position was that, the Supreme Court decision was a perfect one, motivated and legal. Method of destruction of such goods shall be governed in principle by a number of regulations of the Tax Inspectorate. For this reason there appears Tax Inspectorate as authorizing, in last case, of destruction of these goods. Money were destroyed, after the final decision of SC which validated the seizure, removal and destruction of these goods.
“This decision is not final. From the first analysis that we did, the Strasbourg Court has not revealed many aspects. But the decision will be final if the parties do not contest at the Grand Chamber of the ECHR. It follows to first examine it because contestation at the Grand Chamber shall be in exceptional circumstances and there are specific criteria. I need to see if Court jurisprudence was correctly applied, if there are any concerns. But we are examining this possibility”, said Lilian Apostol .
Gintaras Ziaunys, investigated in Vilnius for similar actions
In Lithuania, Ziaunys came to be under criminal investigation after tax police detained a large batch of banknotes and coins, weighing nearly six tons. On February 3rd, lithuanian police arrested near the border with Poland a truck carrying coins and banknotes from Lithuania, Belarus, Russia and Uzbekistan, led by two residents from Vilnius.
After searches, at Gintaras Ziaunys residence in Vilnius, were discovered more coins and banknotes. Ziaunys said that, he bought the banknotes at currency exchange office in Latvia, Belarus, Russia and Uzbekistan, intended for foreign collectors. According to police, he was transporting the money to the German port from Hamburg, planning to take them to USA. So, the tax police opened a criminal case on his behalf for illegal commercial activities.
According to the official website of “Educational Coin Co.., Inc.” company that has signed several contracts with Gintaras Ziaunys, can be purchased as bank notes issued by Transnistrian Bank (Transnistria being included in the category of countries – no) after 2000, as well as banknotes issued by the National Bank of Moldova. So that, three banknotes of 10 lei MDL are sold for 3.30 USD, that is a dollar more than they can be bought at exchange offices after the official exchange rate of NBM.