Interpretations of the Albanian Constitutional Court regarding economic freedom

Interpretations of the Albanian Constitutional Court

The CC has spoken out about economic freedom in several decisions. The Constitutional Court has extensively clarified the concept of freedom of economic activity, guaranteed by Article 11 of the Constitution. According to her, this freedom mainly means the right to enter into contracts, individually or collectively, freely and based on personal will, the right to choose the activity that the individual wants to exercise, the right to select a job according to preference.

This freedom includes all rights relating to the production, distribution, or consumption of goods and services. The highest form of economic independence means property right; the release of movement of labour, capital, and interests without any restrictions. The individual has the right to work, produce, consume and invest in any way he likes, and the state must protect this freedom. Freedom of economic activity contains in itself many rights and liberties such as freedom of business or the ability to set up and close an enterprise, freedom of trade or the absence of barriers related to the import and export of goods and services, monetary freedom as a measure for guaranteed price stability, fiscal freedom on income whether individual or business, in particular, property rights as the ability of individuals to collect, possess and dispose of items free from state interference, freedom of investment and circulation freedom of capital, especially foreign wealth, financial freedom and independence from state control, freedom of labour to interact without restrictions by the state.

The CC has also stated that the freedom of economic activity also contains the state’s obligation, through the legislator, to intervene in regulating this freedom. This obligation for the law of the legislator is expressed through the issuance of concrete legal norms. The aim is to discipline the exercise of free economic activity in specific sectors or areas. Only the state can create a real and optimal environment for the practice of this personal freedom. Therefore, it should be seen as a regulator that aims to protect the market from distortions, which can naturally carry the economic activity’s free development.

According to the Constitution, the Court also clarified the criteria according to which the state can intervene to regulate the exercise of freedom of economic activity. She stated that, based on the Constitution’s structure, the unique feature of Article 11, paragraph 3 is that it is not provided in the group of other rights and freedoms, but in the part where the basic principles on which the organization and functioning of the state. The Constitution has preferred to consider the space of economic activity first as a fundamental principle of the Republic of Albania’s financial system.

For the first time, the CC has expressed itself in the case with the object: “Repeal as unconstitutional of law no. of ownership”, regarding restrictions on property sales transactions. Specifically, the Court stated that: “Analyzing the content of Article 3 of this law, which provides that “Natural and legal persons, local or foreign who through the acquisition of ownership from privatization or in other ways have benefited financial or property values by the controlling entities or persons related to them, through legal actions of selling the properties at prices higher than the privatization price or that the respective average selling price in the free market, are obliged to return them to the administrators of the borrowing companies”,

The Constitutional Court concludes that this provision is contrary to Article 11 of the Constitution, which guarantees freedom of private economic activity. As a constitutional right, this freedom means the state’s obligation not to interfere in the life and sphere of action of private entities, which means that they have autonomy and are free to determine the terms and type of civil contracts that will be concluded with each the other, but provided that these legal actions do not contradict the law’s prescriptive norms.

The CC has also expressed its views on the allegations of monopoly existence, emphasizing market dynamics as a determining element in the presence of a single company providing services, not as a denial of competition, but as the only entity that meets the legal criteria.
With decision no. 10/2008, the CC states: “The Constitutional Court also considers unfounded the claim that the establishment of additional criteria for the exercise of this activity creates a monopoly situation because Albania currently operates only one entity with the quality of the casino. One of the characteristics of free economic activity is its dynamism, which means a particular market situation’s constant change. The law also provides for the geographical distribution of casinos allowing everyone to request a license. So, today there is only one casino does not mean that this situation is dictated by law. It is determined by the market in Albania, which may change over time. ”

The decision, which has broadly defined the standards of economic freedom and the state’s role as a positive intervene, is a decision no. 24/2009, in which the CC states: “This freedom includes all rights related to production, distribution or consumption of goods and services. The highest form of economic independence means the right to property, freedom of movement of labour, capital, and interests without any restrictions. In this sense, the individual has the right to work, produce, consume, and invest in whatever way he pleases, and the state must protect this freedom.

Freedom of economic activity contains in itself many rights and liberties such as freedom of business or the ability to set up and close a business, freedom of trade or the absence of barriers related to the import and export of goods and services, monetary freedom as a measure for guaranteed price stability, fiscal freedom on income whether individual or business, in particular, property rights as the ability of individuals to collect, possess and dispose of items free from state interference, freedom of investment and free movement of capitals, especially foreign wealth, financial freedom and independence from state control, freedom of work to interact without restrictions by the state”.

In the same decision, this Court states that: Freedom of economic activity is negative freedom as long as it is related to the individual’s will to choose the field of exercise of this activity by freely entering into economic relations with other entities. Also, freedom of economic movement has a positive aspect.
It contains the state’s obligation to, through the legislator, intervene in the regulation of this freedom so that the release of economic activity is guaranteed the principle of the social state and the common good. This obligation for the law of the legislator is expressed through the issuance of concrete legal norms. The aim is to discipline the exercise of free economic activity in specific sectors or areas.

In this case, the state must play the role of catalyst for the practical realization of economic freedom on the one hand and the protection of this freedom on the other. “Only the state can create a real and optimal environment for the exercise of this personal freedom. Therefore it should be seen as a regulator to protect the market from the distortions that the free development of economic activity can naturally carry with it.”
In the issue mentioned above, the CC speaks on the restriction of economic freedom to obstruct trade in goods (import-export) through legal barriers.

According to the Court, the impugned decision allowing the marketing of the same product with different amounts of sulphur, allowing the marketing of a product by the company ARMO prohibited for other operators and, imposing on commercial entities that are members of the applicant and operating of wholesale trade of oil, gas and their by-products, equipped with “type A trade licenses”, the purchase of the Diezel D2 product by a single operator if they want to continue to sell this product, creates a monopoly in the market in favour of ARMO sh. a. and consequently violates the freedom of import and export of goods and services, thus restricting their economic freedom”.

Whereas with a decision no. 17/2012, which had to do with the purchase and use of fiscal cash registers, the CC stated that: “… The Court considers that the applicant failed to argue at the constitutional level the claim that, as a result of the control exercised by the state and the financial burden imposed on it due to the obligation to purchase, install, maintain and periodically update fiscal equipment, its economic freedom is violated”.

Also, with the issue of hydrocarbon marking, the CC has stated that: “… the marking is related to nature, purpose, and rules set out on the finalization of this process with the exercise of public power to avoid tax evasion, function typical of state authorities. Moreover, since marking is an instrument of control against abuses in the fiscal system, it is at the executive’s discretion to assess whether it should be carried out by the state itself or a contracted entity. In these conditions, the avoidance of monopoly and, at the same time, the rules on the competition can not be applied free over activities of nature that are not economical.

From all the decisions, it is concluded that the CC had made a difference in the cases when the claims were related to the freedom of the market, sale, and purchase of goods and services and their import-export. Meanwhile, the category of claims that in essence had state control over activities for fiscal purposes has been considered as lack of violation of economic freedom, or as insufficient claims that could justify the non-economic move of the state as interference in the financial independence of entities, respectively control over fiscal cash registers or marking of hydrocarbons. As there have been the CC positions, where there may have been violations, they did not come from the sub-legal act subject to review before this Court, but the law.