2009/04/07 - Pl. ÚS 35/08: Condition of Irreproachability in Trade Licencing Act

07 April 2009

HEADNOTES

1.

If a statute may, pursuant to Art. 26 para. 2 of the Charter of

Fundamental Rights and Freedoms (hereinafter “Charter”), lay down

conditions and restrictions upon the performance of certain professions

or activities, within that framework also lay down restrictions upon the

fundamental right to engage in commercial activity under Art. 26 para.

1, in conjunction with Art. 41 para. 1, of the Charter, it must also, in

the sense of Art. 4 para. 4 of the Charter, preserve the essence and

significance of the given fundamental right. The Constitutional Court

announced this thesis as early as its Judgment No. Pl. ÚS 24/99 of 23

May 2000 (N 73/18 SbNU 135; 167/2000 Sb.), in which it declared the

following: „However much the fundamental right in Art. 26 para. 1 of the

Charter can, in the sense of Art. 41 para. 1 of the Charter, be claimed

only within the confines of the laws implementing those provisions, the

legislature, or norm creator, is also subject to the boundary laid down

in Art. 4 para. 4 of the Charter, which provides that, in employing the

provisions concerning limitations upon the fundamental rights and

freedoms, their essence and significance must be preserved.“

The

objective and intention of the condition of irreproachability,

restricting the fundamental right to engage in commercial activity, is

the protection of the fundamental rights and freedoms of third parties,

which can be affected by commercial activity carried out in conflict

with the law and good morals. However, this condition must also meet the

criterion which flows from the principle of proportionality for the

assessment of normative measures that safeguard one, and restrict

another, fundamental right or freedom.

By

a comparison of two of the normative measures employed in the legal

order which define irreproachability vis-à-vis the commission of

intentional criminal offenses, the Constitutional Court considers that

the rule contested in the petition in part oversteps, in its

consequences, the bounds of the objective pursued (that is, by also

encompassing cases in which the rational connection between the

objective and the normative measure is lacking), and in part, due to its

intensity and extent, it restricts the fundamental right with which it

comes into conflict to a degree which gives rise to an injury in

relation to the third criterion of the test of proportionality, namely

weighing the proportionality of the relation.

2. If a given

proceeding results in a finding that the given statutory provision is in

conflict with the constitutional order, then the rejection on the

merits of the petition proposing the annulment of that provision must be

interpreted as being a rejection of a petition proposing its

inapplicability (§ 70 para. 2 of Act No. 182/1993 Sb., on the

Constitutional Court, per analogiam) – if at the decisive time the

relevant law had already been repealed by the legislature, the

Constitutional Court cannot then annul it as well. If the conclusion is

reached that the statutory provision at issue is in conflict with the

constitutional order [while meeting the standards which follow for the

horizontal effect of fundamental rights and freedoms from judgments No.

Pl. ÚS 33/2000, of 10 January 2001 (N 5/21 SbNU 29; 78/2001 Sb.)No. Pl.

ÚS 42/03 of 28 March 2006 (N 72/40 SbNU 703; 280/2006 Sb.) and No. Pl.

ÚS 38/06 of 6 February 2007 (N 23/44 SbNU 279; 84/2007 Sb.), in other

words for the protection of the fundamental rights of third parties), an

academic statement of judgment concerning its conflict with the

constitutional order is a necessary consequence thereof. The implication

of such a statement of judgment is that the statutory provision at

issue becomes inapplicable (if it is not merely the statutory provision,

that is the legislative measure, but also its objective which is in

conflict with the constitutional order); alternatively, the Court might

define the conditions under which the objective intended by the

legislature can be attained by proceeding in a

constitutionally-conforming manner, that is by means of the direct

applicability of the constitutional order (§ 70 para. 1 of Act No.

182/1993 Sb., as subsequently amended, per analogiam).

In

cases in which, at the decisive time, the relevant statutory provision

has already been repealed by the legislature, the purpose of a concrete

norm control proceeding can be attained by a statement of judgment

declaring the provision‘s conflict with the constitutional order, and

then by the delimitation, in the reasoning of the judgment, of the

framework (conditions) for the direct application of the constitutional

order (§ 70 para. 1 of Act No. 182/1993 Sb., as subsequently amended,

per analogiam). In the matter under adjudication, with regard to Art. 26

paras. 1 and 2, in conjunction with Art. 4 para. 1, of the Charter, the

objective pursued by the legislature in § 6 para. 2, lit. a) of Act No.

455/1991 Sb., as amended by Act No. 167/2004 Sb., can be attained, in

the proceeding before the ordinary court from which the concrete norm

control proceeding arose, by restricting, for the purposes of the Trade

Licensing Act, the condition of irreproachability such that it is not

met only in the case of those intentional criminal offenses, whether

committed separately or concurrently with other criminal offenses, for

which was imposed a non-suspended sentence of imprisonment lasting at

least one year and whose constituent elements pertain to the object of

the entrepreneurial activity, alternatively to entrepreneurial activity

in general.



CZECH REPUBLIC

CONSTITUTIONAL COURT

JUDGMENT


IN THE NAME OF THE CZECH REPUBLIC

 


On

7 April 2009, the Constitutional Court, in its Plenum composed of

Justices Stanislav Balík, František Duchoň, Vlasta Formánková, Vojen

Güttler, Pavel Holländer, Ivana Janů, Vladimír Kůrka, Jiří Mucha, Jan

Musil, Jiří Nykodým, Pavel Rychetský, Eliška Wagnerová and Michaela

Židlická, in the matter of the petition of the Regional Court in Plzeň,

proposing the annulment of § 6 para. 2, lit. a) of Act No. 455/1991 Sb.,

on Trade Entrepreneurship (The Trade Licensing Act), as subsequently

amended, without an oral hearing and without the parties being present,

decided as follows:


Sec.

6 para. 2, lit. a) of Act No. 455/1991 Sb., on Trade Entrepreneurship

(The Trade Licensing Act), as amended by Act No. 167/2004 Sb., was in

conflict with Art. 26 paras. 1 and 2 and Art. 4 para. 4 of the Charter

of Fundamental Rights and Freedoms.
 


REASONING


I.
Description of the Matter and Summary of the Petition


On

21 November 2008, the Constitutional Court received delivery of the

petition of the Regional Court in Plzeň proposing the annulment of § 6

para. 2, lit. a) of Act No. 455/1991 Sb., on Trade Entrepreneurship (The

Trade Licensing Act), as subsequently amended.

The petitioner

did so in accordance with § 64 para. 3 of Act No. 182/1993 Sb., on the

Constitutional Court, as subsequently amended, after it had, in

connection with its decision-making, came to the conclusion, in

conformity with Art. 95 para. 2 of the Constitution of the Czech

Republic (hereinafter „the Constitution“) and § 109 para. 1, lit. c) of

the Civil Procedure Code, that § 6 para. 2, lit. a) of Act No. 455/1991

Sb., on Trade Entrepreneurship (The Trade Licensing Act), as

subsequently amended, which should be applied in the resolution of

matter No. 30 Ca 98/2008, is in conflict with Art. 26 para. 1, in

conjunction with Art. 4 para. 4, of the Charter of Fundamental Rights

and Freedoms (hereinafter „the Charter“).

In the matter referred

to, No. 30 Ca 98/2008, the Regional Court in Plzeň is deciding a suit

against the decision of an administrative body concerning the

cancellation of a trade license pursuant to § 58 para. 1, lit. a), in

conjunction with § 6 para. 1, lit. c) and para. 2, lit. a), of the Trade

Licensing Act. According to the administrative body’s findings, the

plaintiff in the proceeding before the Regional Court had been convicted

in the 22 October 1998 judgment of the Landgericht in Stuttgart, the

Federal Republic of Germany, No. 4 KLs 230 Js 8137/98, of the criminal

offense of the unauthorized import of a substantial amount of narcotic

substances and of the unauthorized trade in substantial amounts of

narcotic substances pursuant to § 1 para. 1, § 3 para. 1, No. 1, § 29a

para. 1, No. 2, § 30 para. 1, No. 4 of the Act on Drugs, and pursuant to

§ 25 para. 2 and § 53 of the Criminal Code, of the Federal Republic of

Germany, and sentenced to an aggregate punishment of imprisonment of

seven years, in other words was convicted of an act which embodies the

elements of a criminal offense according to the legal order of the Czech

Republic as well, namely of the criminal offense of the unauthorized

manufacture and possession of narcotic and psychotropic substances and

poisons under § 187 of the Criminal Code. In the proceeding before the

court, the defendant administrative body pointed out that it was

impermissible to exercise administrative discretion when applying the

provisions of § 6 para. 1, lit. c) and para. 2, lit. a) of the Trade

Licensing Act, which excludes it in cases of the conviction for

intentional conduct and the imposition of a non-suspended sentence of

imprisonment of at least one year. By contrast the plaintiff argued

there was a violation of Art. 3, in conjunction with Art. 26 para. 1, of

the Charter and, as the Constitutional Court has designated it as

disproportionate for entrepreneurship in the field of agriculture

[Judgment No. Pl. ÚS 38/04 of 20 June 2006 (N 125/41 SbNU 551; 409/2006

Sb.)], called into doubt the acceptability of such a condition of

irreproachability for the performance of all trades.

Concurring

with the plaintiff’s constitutional arguments, the ordinary court in the

given matter suspended the proceeding and referred to the

Constitutional Court a petition proposing the annulment of the statutory

provisions at issue. As grounds for its petition, it asserted conflict

between the statutory definition of „irreproachability“ in § 6 para. 2,

lit. a) of the Trade Licensing Act and Art. 4 para. 4, in conjunction

with Art. 26 para. 1, of the Charter.

In the reasoning of its

petition, the court referred to the original wording of § 6 para. 2 of

Act No. 455/1991 Sb., on Trade Entrepreneurship (The Trade Licensing

Act), which provides „for the purposes of this Act, nobody shall be

considered irreproachable who has been finally convicted: a) of a

criminal offense, the constituent elements of which relate to the object

of entrepreneurship; or b) of a criminal offense committed

intentionally if, in view of the nature of the trade and the person of

the entrepreneur, there is concern he would commit the same or similar

offense while carrying on his trade.“. It is convinced that this

statutory language was in conformity with the Charter, since „it

preserves their essence and significance” (Art. 4 para. 4, in

conjunction with Art. 26 para. 1, of the Charter) – a restriction on the

right to engage in commercial activity was rigorously tied to activity

which related to criminal activity, what is more, it emanates from

society’s substantiated interest that, at least for a certain period, a

convicted person be denied the possibility to engage in activity in the

field in which she violated the interests protected in the Criminal

Code. Despite the mentioned assertion, the Regional Court pointed out

that an administrative body’s ability to cancel a trade authorization,

in situations where the ordinary court deciding on guilt and punishment

for certain conduct does not impose the punishment of prohibiting

certain activity, may give rise to a conflict (specifically with

reference to possible conflict with Art. 40 para. 1 of the Charter).

The

petitioner further refers to the fundamental amendment to the Trade

Licensing Act, effected by Act No. 356/1999 Sb. with effect from 1 March

2000, which contained also a newly formulated § 6 para. 2, lit. a),

according to which nobody may be considered as irreproachable who has

been finally convicted of a criminal offense committed intentionally and

given a non-suspended sentence of imprisonment of at least one year; at

the same time, in terms of substance, this rule is identical with the

current rule, as the subsequent amendments (Act No. 167/2004 Sb., Act

No. 130/2008 Sb.) resulted in a purely formal change in formulation.

Regarding the purposes of this fundamental amendment, the Regional Court

refers to the Explanatory Report on the Bill, eventually adopted as No.

356/1999 Sb., which provides that this objective is „to clarify the

existing insufficient and ambiguous criteria, which tied the assessment

of irreproachability to the connection between the constituent elements

of the criminal offense and the object of the entrepreneurship or to the

existence of concern that criminal activity would be repeated in

carrying on the trade“, and which further provides that such an approach

is followed „in view of the currently customary rules for

irreproachability in the Czech legal order“; whereas, „according to the

existing legal rule, irreproachability is assessed according to the

connection of the constituent elements of the criminal offense and the

specific object of entrepreneurship, alternatively according to concern

of repeated criminal activity in carrying on the trade, which does not

allow for restrictions on entrepreneurship by persons who have committed

criminal activities relating to entrepreneurship only generally“.

Finally, the preceding rule was criticized in the Explanatory Report for

„allowing, within the framework of administrative discretion, an overly

subjective evaluation.“

In relation to the grounds of the

contested statutory rule formulated in this way, the Regional Court

objects that the previous legal definition was not in any sense

insufficient or ambiguous, and also refers to the fact that, as far as

concerns the criminal offense‘s connection with a specific activity, an

analogous rule is contained, for ex., in the Criminal Code in relation

to the imposition of the punishment of prohibition of an activity. It

rejected the line of argument in the Explanatory Report on the Bill for

the existing wording of the contested statutory provision and asserts

that precisely the opposite was the case – that the previous rule allows

for the specific features of a concrete and singular case to be taken

into account. It also draws attention to the possibility that

administrative offices be methodically directed when applying § 6 of the

Trade Licensing Act. The petitioner therefore considers the selected

legislative measure to be disproportionate in relation to the attainment

of the objective pursued. It urges that the contested statutory rule

does not take into account the person of the specific convicted

individual, the type of entrepreneurial activity, the objective of the

punishment, its effect on the convicted individual after release from

prison, and the necessity of his integration into ordinary civic life.

In addition, it also highlights the possible conflict between the

statutory provision at issue and Art. 40 of the Charter.

For all

the reasons thus set forth, the Regional Court in Plzeň proposes that,

due to its conflict with Art. 4 para. 4 and Art. 26 para. 1 of the

Charter, § 6 para. 2, lit. a) of Act No. 455/1991 Sb., on Trade

Entrepreneurship (The Trade Licensing Act), as subsequently amended, be

annulled on the day this Judgment of the Constitutional Court appears in

the Collection of Laws.



II.
Summary of the Main Parts of the Statements of Parties to the Proceeding
 

In

accordance with § 42 para. 4 and § 69 of Act No. 182/1993 Sb., on the

Constitutional Court, as subsequently amended, the Constitutional Court

sent the petition at issue to the Assembly of Deputies. In the statement

of the Assembly of Deputies of the Parliament of the Czech Republic,

delivered to the Constitutional Court on 5 January 2009, its Chairman,

Ing. Miloslav Vlček, limited himself merely to a summary of data and of

the procedural phases of the adoption of Act No. 455/1991 Sb., as well

as of Act No. 356/1999 Sb. However much one certainly can welcome in

general a laconic manner of expression, where the statement lacks any

reference whatsoever to the intent of the legislature derivable from the

accompanying documents on the adoption of the Act, a question arises as

to the meaning and intent of the statement on the petition under

adjudication made by this party to the proceeding.

In accordance

with § 42 para. 4 and § 69 of Act No. 182/1993 Sb., as subsequently

amended, the Constitutional Court sent the petition at issue also to the

Senate of the Parliament of the Czech Republic. In the introduction to

its statement, delivered to the Constitutional Court on 29 December

2008, its Chairman, MUDr. Přemysl Sobotka, summarized the legislative

development of the rules in § 6 para. 2, lit. a) of the Trade Licensing

Act, that is, starting with the adoption of Act No. 455/1991 Sb.,

through the adoption of Acts No. 356/1999 Sb. and No. 167/2004 Sb., up

to the adoption of Act No. 130/2008 Sb.; it expressed therein doubts as

to whether one could unambiguously deduce from the requested relief

which version of the Trade Licensing Act is proposed to be annulled,

since the wording proposed to be annulled, § 6 para. 2, lit. a) of the

Trade Licensing Act, is designated „as subsequently amended“.

As

to other matters, the statement contains the averment that, as follows

from the stenographic recording of the debate on Senate Document No.

356/1999 of the bill, which amends Act No. 455/1991 Sb., on Trade

Entrepreneurship (The Trade Licensing Act), the term, irreproachability,

was referred to before the full Senate in the report given by the

Minister of Industry and Trade, the initiator of this bill, which

asserted that it concerns „a toughening up of the general conditions for

carrying on a trade, restricting entrepreneurship by persons convicted

of serious criminal offenses or having tax arrears.“ Further, the Common

Rapporteur’s Report, which was submitted by the Rapporteur from the

Committee on National Economy, Agriculture and Transport, stated, among

other things, that „the objective was, in particular, to newly define

the conditions of entry into entrepreneurship for natural and legal

persons and to expand the existing condition of no criminal record and

no convictions of intentional criminal offenses, for which was imposed a

non-suspended sentence of imprisonment of longer than one year, or of

criminal offenses, the constituent elements of which are related to

entrepreneurship“. The Chairman of the Senate observed in this context

that, neither when considering the bill in individual committees nor by

the full Senate were any doubts heard as to whether the rules concerning

the general conditions for carrying on a trade were in harmony with the

relevant provisions of the Charter, and declared that identically with

the committee resolutions, the full Senate, on 9 December 1999 at its

12th Session, adopted resolution (No. 232), by which it approved the

bill in the same wording it had when transmitted by the Assembly of

Deputies.

The Senate debated another bill amending Act No.

455/1991 Sb. (Senate Document No. 2004/292), although, according to the

party to the proceeding, it appeared from the debate that had taken

place, in individual committees and before the full Senate, that certain

of the Senators considered the proposed rule relating to blameless

character as conflicting with the Charter (the full Senate then, at its

14th Session on 25 March 2004, by its Resolution No. 364, approved the

bill with the same wording it had when transmitted by the Assembly of

Deputies). According to it, the same applied as well for the debate on

the last bill amending Act No. 455/1991 Sb. (Document No. 211/2008); and

the full Senate, by its Resolution No. 333 adopted at its 12th Session

of 20 March 2008, approved the bill in the same wording it had when

transmitted by the Assembly of Deputies.
 


III.
Dispensing with an Oral Hearing
 

Pursuant

to § 44 para. 2 of Act No. 182/1993 Sb., the Constitutional Court may,

with the consent of the parties, dispense with an oral hearing if

further clarification of the matter cannot be expected from it. In view

of the fact that both the petitioner, in its 18 November 2008 petition,

and the parties to the proceeding, in the 1 April 2009 communication of

the Chairman of the Assembly of Deputies of the Parliament of the Czech

Republic and the 31 March 2008 communication of the Chairman of the

Senate of the Parliament of the Czech Republic, expressed their consent

to dispensing with an oral hearing, and inasmuch as the Constitutional

Court is of the view that further clarification of the matter cannot be

expected from such a hearing, an oral hearing was dispensed with in the

matter under adjudication.



IV.
The Conditions of the Petitioner‘s Standing
 

The

petition proposing the annulment of § 6 para. 2, lit. a) of the Trade

Licensing Act was submitted by the Regional Court in Plzeň pursuant to §

64 para. 3 of Act No. 182/1993 Sb., as subsequently amended.

As

has already been averted to above, in the matter before the Regional

Court in Plzeň, No. 30 Ca 98/2008, the plaintiff, in his suit, is

seeking the annulment of the 26 June 2008 decision, No. VVŽÚ/5727/08, of

the defendant administrative body, namely the Regional Office of the

Plzeň Region, the regional trade licensing office, which rejected on the

merits his appeal against the 17 April 2008 decision of the Municipal

Office in Domažlice, No. OŽ-6414/2007-11356/2008/See, on the

cancellation of his trade authorization in accordance with § 58 para. 1,

lit. a), with consideration given to § 6 para. 1, lit. c) and para. 2,

lit. a), of Act No. 455/1991 Sb., on Trade Entrepreneurship (The Trade

Licensing Act), and affirmed the first instance administrative decision.

After

the Regional Court in Plzeň, in connection with its decision-making,

reached the conclusion, in conformity with Art. 95 para. 2 of the

Constitution, that § 6 para. 2, lit. a) of the Trade Licensing Act,

which should be applied in resolving matter No. 30 Ca 98/2008, is in

conflict with Art. 4 para. 4 and Art. 26 para. 1 of the Charter, by its

resolution of 18 November 2008, No. 30 Ca 98/2008-19, it suspended the

original proceeding under § 48 para. 1, lit. a) of the Civil Procedure

Code, and submitted to the Constitutional Court the norm control

petition under adjudication.

The purpose of concrete norm control

pursuant to Art. 95 para. 2 of the Constitution is judicial review of

the constitutionality of a statute, alternatively individual provisions

thereof, which an ordinary court should apply in considering and

deciding a certain specific matter. This purpose also delimits an

ordinary court’s latitude to proceed in accordance with Art. 95 para. 2

of the Constitution, which is limited solely and exclusively to the

substantive and procedural law relevant to the matter under

adjudication. Thus the procedural standing conditions for an ordinary

court under § 64 para. 3 of Act No. 182/1993 Sb., on the Constitutional

Court, as subsequently amended, is that the statute, or individual

provision thereof, the annulment of which is proposed, bear such a

relation to the original proceeding at issue, that it constitutes for

the matter under adjudication the grounds for decision on the part of

the ordinary court.

As follows from the description of the

proceeding at issue before the ordinary court, it can be affirmed that

the petitioner meets the conditions of standing for a norm control

proceeding.



V.
The

Relief Sought in the Petition, the Wording of the Contested Legal

Enactment, and the Assessment of whether it is Well-Founded to Reject

the Petition on Preliminary Grounds in accordance with § 66 para. 1 of

Act No. 182/1993 Sb.


According

to the relief sought in the petition, the Regional Court in Plzeň asked

the Constitutional Court to annul, in its judgment, 㤠6 para. 2, lit.

a) of Act No. 455/1991 Sb., on Trade Entrepreneurship (The Trade

Licensing Act)“.

Sec. 6 para. 2, lit. a) of the Trade Licensing

Act, valid and in effect until 30 June 2008 (that is, until the entry

into effect of Act No. 130/2008 Sb.), in other words, Act No. 455/1991

Sb., as amended by Act No. 167/2004 Sb., read as follows: „For the

purposes of this Act, a person cannot be considered irreproachable if he

has been finally convicted and given a non-suspended sentence of

imprisonment for a criminal act committed intentionally, whether

separately or concurrently with another criminal offense, for which he

was given a non-suspended sentence of imprisonment of at least one

year“. Art. I, point 16 of Act No. 167/2004 Sb. provided the following:

»§ 6 para. 2, litera a) shall read: „a) given a non-suspended sentence

of imprisonment for a criminal act committed intentionally, whether

separately or concurrently with another criminal offense, and was given a

non-suspended sentence of imprisonment of at least one year,“«.

The

wording of the statutory provision under adjudication, as amended by

Act No. 130/2008 Sb. (Art. I, point 9) is then the following: „For the

purpose of this Act, a person cannot be considered irreproachable if he

has been finally convicted of an intentional criminal offense, whether

committed separately or concurrently with another criminal offense, for

which he was given a non-suspended sentence of imprisonment of at least

one year, or“.

According to § 75 para. 1 of the Code of

Administrative Justice, when reviewing a decision, the Court proceeds on

the basis of the factual and legal situation which prevailed at the

time the administrative body decided. It follows therefrom that, in the

matter considered and decided by the ordinary court, the relevant legal

provision is § 6 para. 1, lit. a) [a mistake, no?] of the Trade

Licensing Act, in the wording valid and in effect until 30 June 2008.

In

the meantime the relevant statutory provision was amended or repealed.

In its Judgment No. Pl. ÚS 38/06 of 6 February 2007 (N 23/44 SbNU 279;

84/2007 Sb.), the Constitutional Court gave its general views on the

consequences of such a situation. In that case it made primary reference

to Judgment No. Pl. ÚS 33/2000 of 10 January 2001 (N 5/21 SbNU 29;

78/2001 Sb.) and Judgment No. Pl. ÚS 42/03 of 28 March 2006 (N 72/40

SbNU 703; 280/2006 Sb.), which provided as follows: “. . . if an

ordinary court judge comes to the conclusion that the statute which

should be applied in the resolution of a matter (that is, not only one

which is valid at that time, but also one no longer valid yet still

applicable) is in conflict with a constitutional act, it is required to

submit the matter to the Constitutional Court (Art. 95 para. 2 of the

Constitution). The Constitutional Court considered that a refusal to

provide assistance to the ordinary court by its decision on the

constitutionality or unconstitutionality of the applicable statute would

give rise to an irresolvable situation of an artificial legal vacuum;

it characterized an ordinary court's decision on the unconstitutionality

of the applied provisions as a procedural step in conflict with the

Constitution, specifically in conflict with the principle of a

concentrated constitutional judiciary (Art. 83 and Art. 95 paras. 1 and 2

of the Constitution). Since this approach opens the door to assessing

prior legally-relevant conduct (or legally-relevant events) in

accordance with subsequent, yet constitutionally-conforming, legal

rules, and thus embodies the attributes of genuine retroactivity, the

Constitutional Court fundamentally restricted this approach to

situations susceptible to regulation by means of genuine retroactivity

[see also Judgment No. Pl. ÚS 21/96 of 4 February 1997 (N 13/7 SbNU 87;

63/1997 Sb.)] and declared that it follows from the principle of the

protection of citizens‘ trust in the law that the principle that

retroactivity is impermissible does not apply to the retroactive

application of legal norms which do not represent an encroachment upon

legal certainty or acquired rights; the given thesis, in terms of the

classification of fundamental rights and freedoms with regard to their

possible addressees, applies to cases in which this addressee is a

public authority. According to the Constitutional Court, in cases where

it declares unconstitutional an already repealed act and assesses, in

accordance with constitutionally-conforming legal rules with effect ex

tunc, prior legally-relevant conduct on the part of public authorities,

such genuine retroactivity does not give rise to a violation of the

principle of the protection of citizens‘ trust in the law, or a possible

encroachment upon legal certainty or acquired rights. In its Judgment

No. Pl. ÚS 38/06, the Constitutional Court also drew attention to the

fact that a differing situation arises in cases of the horizontal effect

of fundamental rights and freedoms, in which it is necessary to apply,

in relation to third parties, the principles of the protection of

citizens‘ trust in the law, legal certainty, and acquired rights: an

unrestricted application of the approach based on the interpretation of

Art. 95 para. 2 of the Constitution contained in Judgment No. Pl. ÚS

33/2000, affirmed in Judgment No. Pl. ÚS 42/03 (see all above), would

thus establish genuine retroactivity in relation to such third parties,

and consequently be in conflict with the principle of the law-based

state (Art. 1 para. 1 of the Constitution). The Constitutional Court has

accepted, as the single possible exception to the prohibition of

retroactive effect of legal norms in norm control proceedings with

respect to the horizontal effect of fundamental rights and freedoms, the

protection of values which fall within the framework of the substantive

core of the Constitution under its Art. 9 para. 2; the conditions of

their protection, even at the price of making an exception to the

prohibition on genuine retroactivity, are contained in the famous

„Radbruch formula“.

From what has been stated, the prayer for

relief in this case cannot be interpreted as other than a „petition

proposing the annulment“ of § 6 para. 2, lit. a) of the Trade Licensing

Act valid and in effect until 30 June 2008. The statutory provision

under adjudication governs a legal relation in which the addressee of

the asserted grounds of unconstitutionality (Art. 4 para. 4 and Art. 26

para. 1 of the Charter) is a public authority, and not a private law

subject. Accordingly, in the decided matter the conditions are met for a

concrete norm control proceeding under Art. 95 para. 2 of the

Constitution in the sense of the proposition of law enunciated by the

Constitutional Court in its judgments No. Pl. ÚS 33/2000, No. Pl. ÚS

42/03 and No. Pl. ÚS 38/06 (see all above), so that it finds no reason

to reject the petition on preliminary grounds pursuant to § 66 para. 1

of Act No. 182/1993 Sb.

Finally, the question arises at this

juncture as to the relevance that a legislative change has for norm

control proceedings. In its Judgment No. Pl. ÚS 15/01 of 31 October 2001

(N 164/24 SbNU 201; 424/2001 Sb.), the Constitutional Court gave its

view on this issue, on the consequences for proceeding pursuant to § 66

para. 1 and § 67 para. 1 of Act No. 182/1993 Sb., of a change in the

statutory provision in a norm control proceeding, namely, that a change

of the proposed statutory provision constitutes grounds for rejecting

the petition on preliminary grounds, or for dismissing the norm control

proceeding, solely when it is decisive for the assessment of the

constitutionality of that provision. The Constitutional Court

subsequently affirmed this proposition of law in a number of its further

judgments [No. Pl. ÚS 38/04 (see above), Judgment No. Pl. ÚS 43/04 of

14 July 2005 (N 139/38 SbNU 59; 354/2005 Sb.), Judgment No. Pl. ÚS 5/05

of 4 April 2006 (N 77/41 SbNU 11; 303/2006 Sb.), and No. Pl. ÚS 38/06

(see above)]. However, this situation differs from the mentioned one, as

there was not a mere amendment, rather the contested provision was

repealed in its entirety and replaced with a new provision (or new legal

enactment); and the situations differ even if they are formulated in an

identical manner. Since the normative existence of a legal enactment

(its validity) is constituted by the unity of the norm-creator’s

intention and the manifestation thereof (the publication of the

enactment), two legal enactments that are identical in content, but

consecutive in time, do not have normative identity (the identity of

their validity). On the basis of this proposition of law, the

Constitutional Court has, in analogous cases, even applied § 67 para. 1

(alternatively § 66 para. 1) of Act No. 182/1993 Sb. [see, for ex.,

Resolution No. Pl. ÚS 39/04 (not published in the SbNU; accessible at

nalus.usoud.cz)].

The matter under adjudication also

concerns a dissimilar case. The amendment to the Trade Licensing Act

effected by Act No. 130/2008 Sb. did not just amend a part of § 6 para.

2, lit. a) of the Trade Licensing Act, rather the previous wording was

repealed in its entirety and replaced by new wording (and that would be

so regardless of whether the new wording contained changes that are

relevant in terms of the grounds for adjudicating the constitutionality

of the entire provision). From this follows the conclusion that, in

spite of an identical substance, due to the absence of unity of the

norm-creator‘s intention and manner of expressing it, the requirements

have been met in the decided matter for a concrete norm control

proceeding pursuant to Art. 95 para. 2 of the Constitution in the sense

of the proposition of law enunciated by the Constitutional Court in its

judgments No. Pl. ÚS 33/2000, No. Pl. ÚS 42/03 and No. Pl. ÚS 38/06 (see

all above), that is, the constitutional review of § 6 para. 2, lit. a)

of the Trade Licensing Act, valid and in effect until 30 June 2008.
 


VI.
The Constitutional Conformity of the Exercise of Competence and of the Legislative Process
 

In

conformity with the provisions of § 68 para. 2 of Act No. 182/1993 Sb.,

as subsequently amended, in norm control proceedings the Constitutional

Court is obliged to assess whether the contested statute, or individual

provisions thereof, alternatively some other legal enactment, or

individual provisions thereof, was adopted and issued within the

confines of the powers set down in the Constitution and in the

constitutionally-prescribed manner.

As was ascertained from the

Assembly documents and stenographic records, as well as from the

statements of parties to the proceeding, at its 27th Session on 24

February 2004, the Assembly of Deputies approved, in the 3rd reading by

its Resolution No. 921, the bill for the act at issue, that is, Act No.

167/2004 Sb., which Amends Act No. 455/1991 Sb., on Trade

Entrepreneurship (The Trade Licensing Act), as subsequently amended, and

certain related statutes, and that of the 186 Deputies present, 130

voted in favor of its adoption and 2 were opposed.

On 25 March

2004, the full Senate, at the 14th Session of its fourth electoral term,

considered the bill and, by its Resolution No. 367, approved the bill

in the same wording it had when transmitted by the Assembly of Deputies.

In vote no. 39, 40 of the 62 Senators present voted in favor, and 22

abstained.

The Act at issue was signed by the competent

constitutional officials and duly promulgated as No. 167/2004 Sb. in

Part 57 of the Collection of Laws, which was distributed on 16 April

2004, and, pursuant to its Art. X, entered into effect on the day that

the Treaty of Accession of the Czech Republic to the European Union came

into effect, that is, on 1 May 2004.
 


VII.
The Contested Statutory Provision‘s Substantive Conformity with the Constitutional Order
 

The

substantive amendment, contested by the petitioner in its petition,

which defines the term, irreproachability, vis-à-vis the commission of

an intentional criminal offense, was introduced by means of a new

formulation of § 6 para. 2, lit. a) of the Trade Licensing Act, as

amended by Act No. 356/1999 Sb. The Explanatory Report to the Government

Bill to Amend the Trade Licensing Act (Document 263, 1999, III

Electoral Term), which bill was adopted by the Parliament of the Czech

Republic and promulgated as No. 356/1999 Sb., regarding the new

formulation of § 6 para. 2, lit. a) (which in contrast to the rule

contained in Act No. 455/1991 Sb. did not place conditions upon the

term, irreproachability, in connection with the commission of a criminal

offense with the object of entrepreneurship) stated the following:

„Irreproachability is being newly defined, namely, with regard to its

currently customary regulation within the Czech legal order, in

connection with a final conviction for a criminal offense committed

intentionally, while the consequences of a final conviction for a

criminal offense are distinguished in the bill according to their degree

of seriousness. A final conviction of an intentional criminal offence,

if a non-suspended sentence of imprisonment of at least one year is

imposed, always results in the loss of irreproachability. The same

consequence will also result from a final conviction for a criminal

offense, the constituent elements of which relate to entrepreneurship or

to the object of entrepreneurship, while the bill distinguishes in more

detail criminal offenses committed intentionally and negligently. Under

the existing legal rules, irreproachability is assessed according to

the connection of the constituent elements of the criminal offense and

the specific object of the entrepreneurial activity, alternatively in

accordance with the fear that criminal activity will be repeated in

carrying on the trade, which does not allow for restrictions on the

entrepreneurship of those persons who have engaged in criminal activity

that relates to entrepreneurship generally. In assessing one’s

irreproachability, it will still be ascertained whether there are

grounds for concern of repeated criminal activity when carrying on the

trade, as this legal rule makes possible a too subjective evaluation

within the bounds of administrative discretion.“

At the 17th

Session of the Assembly of Deputies of the Parliament of the Czech

Republic, in the second reading, held on 13 October 1999, on the reasons

for the new wording of § 6 para. 2 of the Trade Licensing Act, the

Minister of Industry and Trade, Miroslav Grégr, stated: „It tightens up

and makes more precise the requirement of irreproachability of

entrepreneurs, so as to more effectively restrict access to

entrepreneurship of persons convicted of serious criminal offenses. In

the future, the requirement of irreproachability should include not only

criminal offenses, the constituent elements of which relate to the

subject of entrepreneurship, but every intentional criminal act for

which has been imposed a non-suspended sentence of imprisonment of at

least one year in length.“

The wording of the statutory provision

in question, contested by the petition of the Regional Court in Plzeň,

which was adopted by Act No. 167/2004 Sb., thus emanates from an

intention which does not implicate the grounds of the asserted

unconstitutionality. In the Explanatory Report to the Government Bill to

Amend the Trade Licensing Act (Document 200, 2003, IV. Electoral Term),

adopted by the Parliament of the Czech Republic and published as No.

167/2004 Sb., in the given context the following is asserted: „In § 6

para. 2, litera a), the existing legal rule for the assessment of

irreproachability is tightened up for cases where a natural person has

been finally convicted of an intentional criminal offense committed

concurrently with other criminal offenses.“

If the reason for the

contested statutory rule was to restrict entrepreneurial activity by

those persons who commit criminal offenses generally related to

entrepreneurial activity, as well as to make more rigorous the

requirements for irreproachability, such a rule is considered by the

petitioner as standing in conflict with the fundamental right to engage

in commercial activity under Art. 26 para. 1, in conjunction with Art. 4

para. 4, of the Charter.

The Constitutional Court concerned

itself, in its Judgment No. Pl. ÚS 38/04 (see above), with the issue of

irreproachability in conjunction with the provisions of Art. 26 of the

Charter. It announced in that Judgment that, however much Art. 26 para. 2

of the Charter presupposes the possibility to restrict, by statute, the

performance of certain professions or activities, without specifying

the objective of the restriction, legal norms issued on the basis

thereof must, nonetheless, pass muster in terms of the test of

proportionality. It follows from what has been said that first of all it

is also necessary to assess the very nature of the objectives which the

restrictions pursue and that the necessity of the means selected must

also be reviewed in terms of whether they are the least restrictive of

the fundamental right, that is, to the freedom of entrepreneurship.

Then, in assessing the constitutionality of § 2e para. 1, lit. c) and

para. 5 of Act No. 252/1997 Sb., on Agriculture, as subsequently

amended, it came to the conclusion that the very condition of

irreproachability did not pass muster in terms of the necessity of the

selected means, as it is not the means least restrictive of the

fundamental right of entrepreneurship and the desired state of affairs

(the objective pursued) can be attained by some other means. For these

reasons the Constitutional Court decided to annul § 2e para. 1, lit. c)

of the Act on Agriculture, which defined the condition of

irreproachability and also annulled, as incidental thereto, § 2e para. 5

of the Act on Agriculture, which defined the concept of

irreproachability for the purposes of the Act on Agriculture.

If a

statute may, pursuant to Art. 26 para. 2 of the Charter, lay down

conditions and restrictions upon the performance of certain professions

or activities, within that framework also lay down restrictions upon the

fundamental right to engage in commercial activity under Art. 26 para.

1, in conjunction with Art. 41 para. 1, of the Charter, it must also, in

the sense of Art. 4 para. 4 of the Charter, preserve the essence and

significance of the given fundamental right. The Constitutional Court

announced this thesis as early as its Judgment No. Pl. ÚS 24/99 of 23

May 2000 (N 73/18 SbNU 135; 167/2000 Sb.), in which it declared the

following: „However much the fundamental right in Art. 26 para. 1 of the

Charter can, in the sense of Art. 41 para. 1 of the Charter, be claimed

only within the confines of the laws implementing those provisions, the

legislature, or norm creator, is also subject to the boundary laid down

in Art. 4 para. 4 of the Charter, which provides that, in employing the

provisions concerning limitations upon the fundamental rights and

freedoms, their essence and significance must be preserved.“

The

objective and intention of the condition of irreproachability,

restricting the fundamental right to engage in commercial activity, is

the protection of the fundamental rights and freedoms of third parties,

which can be affected by commercial activity carried out in conflict

with the law and good morals. However, this condition must also meet the

criterion which flows from the principle of proportionality for the

assessment of normative measures that safeguard one, and restrict

another, fundamental right or freedom.

According to the

Constitutional Court’s constant jurisprudence [see Judgment No. Pl. ÚS

4/94 of 12 October 1994 (N 46/2 SbNU 57; 214/1994 Sb.), Judgment No. Pl.

ÚS 15/96 of 9 October 1996 (N 99/6 SbNU 213; 280/1996 Sb.), Judgment

No. Pl. ÚS 16/98 of 17 February 1999 (N 25/13 SbNU 177; 68/1999 Sb.),

Judgment No. Pl. ÚS 41/02 of 28 January 2004 (N 10/32 SbNU 61; 98/2004

Sb.) and others], the principle of proportionality is based on a

three-step methodology. The first is the evaluation of the ordinary law

in terms of its suitability, which consists in assessing the normative

measure selected in terms of the possible fulfillment of the objective

pursued. If the normative measure at issue is not capable of achieving

the objective pursued, then it is a manifestation of arbitrariness on

the part of the legislature, which is deemed to be in conflict with the

principle of the law-based state. The second step in complying with the

principle of proportionality is the assessment of the ordinary law in

terms of its necessity, which analyzes the pluralism of possible

normative measures in relation to the intended objective and their

subsidiarity in terms of the restriction on the

constitutionally-protected value – a fundamental right or public good.

If the objective pursued by the legislature can be attained by

alternative normative measures, then only that one is

constitutionally-conforming which restricts the given

constitutionally-protected value to the least extent possible. If the

ordinary law under adjudication pursues, on the one hand, the protection

of certain of the constitutionally-protected values, but, on the other

hand, restricts another, then the third test of the principle of

proportionality, which is that of gauging, represents a methodology for

gauging the relative weight of those constitutional values which have

come into conflict.

If the first part of the principle of

proportionality is the scrutiny of the rational connection between the

objective pursued by the legislature and the normative measure chosen by

it, in order to assess the matter, the necessity arises of

substantiating the thesis according to which the commission of any

intentional criminal offense whatsoever, for which was imposed a

non-suspended sentence of imprisonment of at least one year,

categorically calls into question the credibility of a tradesman when

engaging in entrepreneurship (for ex., someone engaged in the technical

trades of smithing, butchery, carpentry, baking, etc. who commits the

criminal offense of brawling).

In the Czech Republic’s legal

order, the concept of irreproachability as regard the commission of an

intentional criminal act is generally defined in reference to the

subject of the certified activity. This fact can be demonstrated by a

number of statutory provisions:

- according to § 4a para. 1, lit.

a) of Act No. 553/1991 Sb., on the General Police, as subsequently

amended: „for the purposes of this Act, a person who has been finally

convicted of an intentional criminal act or has, in the preceding 5

years, been finally convicted of a negligent criminal act, is not

considered to have an irreproachable character, if the conduct involved

in the commission of the criminal offense conflicts with the mission of a

police officer under this Act“;

- according to § 3 para. 3 of

Act No. 95/2004 Sb., on the Conditions for the Acquisition and

Recognition of Professional Qualifications and Specialist Qualifications

Necessary for the Performance of the Medical Profession as a Physician,

Dentist or Pharmacist: „for the purposes of this Act, a person is

considered to have an irreproachable character if he has not been

finally convicted and sentenced to imprisonment for an intentional

criminal act committed in connection with the provision of medical care,

or if he is looked upon as if he had not been so convicted“;

-

according to § 7, lit. a) of Act No. 312/2006 Sb., on Trustees in

Bankruptcy, as amended by Act No. 41/2009 Sb.: „the condition of

irreproachability under § 6 para. 1, lit. d) is not met by a natural

person who has been finally convicted of an intentional criminal act

committed in connection with the performance of his duties as a trustee

in bankruptcy, or of any other intentional criminal act in contradiction

of the imperative rules of the market economy“,

- according to §

6 para. 4, lit. a) of Act No. 245/2006 Sb., on Public Non-Profit

Institutional Medical Facilities and on Amendments to Certain Acts: „for

the purposes of this Act, a person who has been finally convicted of a

criminal offense, the constituent elements of which are connected with

the provision of health care, cannot be considered as irreproachable“;

-

according to § 8 para. 3, lit. b) of Act No. 417/2004 Sb., on Patent

Misdemeanors and on Amendments to the Act on Measures for the Protection

of Industrial Property: „for the purposes of this Act, a person who has

been finally convicted of a criminal offense, committed negligently, in

connection with the provision of services as a patent agent, cannot be

considered as irreproachable“;

- § 6 para. 2, lit. b) of Act No.

162/2003 Sb., on the Conditions for the Operation of a Zoological Garden

and on Amendments to Certain Other Acts (the Act on Zoological

Gardens): „the condition of irreproachability is not met by anyone who,

in the three years preceding the submission of the application, had been

finally convicted of a criminal offense, the constituent elements of

which are connected with activities performed in a zoological garden

(unless he is looked upon as if he had not been convicted), or by anyone

who, in the given period, was found guilty of a misdemeanor or other

administrative offenses pursuant to legal enactments on the protection

of nature and the environment, veterinary regulations or enactments on

the protection of animals from abuse“;

In applying the test of

suitability within the framework of the test of proportionality, the

Constitutional Court in part evaluates whether a rational relation

exists between the normative measure and its objective, alternatively

the degree to which it is presumed to be, or is actually, realized, and

in part the intensity and extent of the restriction upon the fundamental

right or freedom, or public good, with which it comes into conflict.

By

a comparison of two of the normative measures employed in the legal

order which define irreproachability vis-à-vis the commission of

intentional criminal offenses, the Constitutional Court considers that

the rule contested in the petition in part oversteps, in its

consequences, the bounds of the objective pursued (that is, by also

encompassing cases in which the rational connection between the

objective and the normative measure is lacking), and in part, due to its

intensity and extent, it restricts the fundamental right with which it

comes into conflict to a degree which gives rise to an injury in

relation to the third criterion of the test of proportionality, namely

weighing the proportionality of the relation. Neither, in this

connection, are valid even possible objections of the uncertainty or

lack of clarity of the definition of the term, irreproachability

vis-à-vis the commission of an intentional criminal offense relating to

the subject of the activity to be certified. A decision on the

cancellation of a trade authorization is reviewable by a court, as is

the administrative law interpretation of the term, irreproachability

vis-à-vis the commission of an intentional criminal offense relating to

the subject of the activity to be certified. Further, the existing court

jurisprudence in no way signals the fact that ordinary courts would not

be in a position to provide such an interpretation, resting on rational

arguments. As an illustration of this conclusion, let’s take the

decision of the Regional Court in Ostrava, No. 22 Ca 137/2004, in which

was asserted that „criminal offenses leading to the loss of

irreproachability in the sense of § 6 para. 2, lit. b) of Act No.

455/1991 Sb., of the Trade Licensing Act, are not only those criminal

offenses a characteristic constituent element of which is

entrepreneurship (economic criminal offenses): what is indispensable for

the application of the cited provision is the issue of whether the

criminal offense bears some relation to the entrepreneurial activities

of the specific person. Thus, an entrepreneur cannot be considered

irreproachable if the conduct, for which he was finally convicted in a

criminal proceeding, consisted in enforcing his claims.“

For the

given reasons, the Constitutional Court has come to the conclusion that §

6 para. 2, lit. a) of Act No. 455/1991 Sb., on Trade Entrepreneurship

(The Trade Licensing Act), as amended by Act No. 167/2004 Sb., was in

conflict with Art. 26 paras. 1 and 2, in conjunction with Art. 4 para.

1, of the Charter.



VIII.
The Formulation of a „Derogational“ Statement of Judgment and its Legal Effects
 

Where,

pursuant to Art. 95 para. 2 of the Constitution, the Constitutional

Court has decided a concrete norm control proceeding in the sense of the

proposition of law announced in its judgments nos. Pl. ÚS 33/2000, Pl.

ÚS 42/03, and Pl. ÚS 38/06 (see above for all), upon making a finding of

constitutional conformity, it has rejected on the merits the petition

„proposing the annulment“ of the statutory provision. In cases where it

has concluded that the contested statutory provision is in conflict with

the constitutional order, it has issued an academic statement of

judgment:

- in its Judgment No. Pl. ÚS 48/06 of 9 December 2008

(54/2009 Sb.), it did so in the following way: »The third sentence of §

105 para. 1 of Act No. 235/2004 Sb., on Value-Added Tax, as worded prior

to the amendment effected by Act No. 296/2007 Sb., specifically the

text: „A declaration of bankruptcy does not suspend any tax proceedings

and, following the declaration of bankruptcy, any assessed excessive

deduction shall be returned to the taxpayer, provided it does not have

tax arrears arising prior, or even subsequent, to the declaration of

bankruptcy“.«, was in conflict with Art. 11 para. 1 of the Charter of

Fundamental Rights and Freedoms;

- then, in its Judgment No. Pl.

ÚS 72/06 of 29 January 2008 (291/2008 Sb.), with the following

statement of judgment: „The Constitutional Court . . . reached the

conclusion that the third sentence of § 57 para. 5 of Act No. 337/1992

Sb., on the Administration of Taxes and Fees, as worded prior to the

amendment effected by Act No. 230/2006 Sb., was in conflict with Art. 1,

Art. 11 para. 1, Art. 36 paras. 1 and 2, and Art. 37 para. 3 of the

Charter, Art. 6 para. 1 and Art. 13 of the Convention; it therefore

granted, in respect of that provision, the Supreme Administrative

Court‘s petition made pursuant to Art. 95 para. 2 of the Constitution.

In consideration of Art. 89 para. 2 of the Constitution, the

implications of the finding of unconstitutionality must be reflected in

the decisional practices of public authorities, meaning they must not

apply the cited provision when resolving specific cases.“;

- in

its Judgment No. Pl. ÚS 12/06 of 2 July 2008 (342/2008 Sb.), with the

following academic statement of judgment: »The petition requesting a

declaration that the first sentence of § 37a para. 1 of Act No. 588/1992

Sb., on Value-Added Tax, as subsequently amended, is unconstitutional

(in particular the following text: „If, in consequence of the assessment

of an excessive deduction, an overpayment subject to return shall come

into being, it shall be returned to the taxpayer without an application

within 30 days of the excessive deduction being assessed, even in the

case that bankruptcy is declared. In such a case, it is necessary to

proceed in accordance with a separate enactment.“) is rejected on the

merits. There is no interpretation of Art. 11 of the Charter by which

one can deduce an enhanced protection of the rights of the state as an

owner (in tax matters represented by a tax administrator), which would

lead in specific matters being adjudicated (that is, in cases where

bankruptcy is declared) to the state being given preferential treatment

and its being de facto accorded a privileged status vis-à-vis other

creditors.«.

The Constitutional Court observes that the types of

statements of judgment contained in § 70 of Act No. 182/1993 Sb. do not

correspond to the mentioned modality of the concrete norm control

proceeding. In a number of its judgments, the Constitutional Court has

adopted an extension of the typology of statements of judgment under §

70 of Act No. 182/1993 Sb. It did so, for ex., in its judgments No. Pl.

ÚS 41/02 of 28 January 2004 (N 10/32 SbNU 61; 98/2004 Sb.), No. Pl. ÚS

34/04 of 14 July 2005 (N 138/38 SbNU 31; 355/2005 Sb.), and No. Pl. ÚS

43/04 (see above), in which it laid out the reasons for its approach.

If

a given proceeding results in a finding that the given statutory

provision is in conflict with the constitutional order, then the

rejection on the merits of the petition proposing the annulment of that

provision must be interpreted as being a rejection of a petition

proposing its inapplicability (§ 70 para. 2 of Act No. 182/1993 Sb. per

analogiam) – if at the decisive time the relevant law had already been

repealed by the legislature, the Constitutional Court cannot then annul

it as well. If the conclusion is reached that the statutory provision at

issue is in conflict with the constitutional order (while meeting the

standards which follow for the horizontal effect of fundamental rights

and freedoms from judgments No. Pl. ÚS 33/2000, No. Pl. ÚS 42/03 and No.

Pl. ÚS 38/06, in other words for the protection of the fundamental

rights of third parties), an academic statement of judgment concerning

its conflict with the constitutional order is a necessary consequence

thereof. The implication of such a statement of judgment is that the

statutory provision at issue becomes inapplicable (if it is not merely

the statutory provision, that is the legislative measure, but also its

objective which is in conflict with the constitutional order);

alternatively, the Court might define the conditions under which the

objective intended by the legislature can be attained by proceeding in a

constitutionally-conforming manner, that is by means of the direct

applicability of the constitutional order (§ 70 para. 1 of Act No.

182/1993 Sb., as subsequently amended, per analogiam).

In cases

in which, at the decisive time, the relevant statutory provision has

already been repealed by the legislature, the purpose of a concrete norm

control proceeding can be attained by a statement of judgment declaring

the provision‘s conflict with the constitutional order, and then by the

delimitation, in the reasoning of the judgment, of the framework

(conditions) for the direct application of the constitutional order (§

70 para. 1 of Act No. 182/1993 Sb., as subsequently amended, per

analogiam). In the matter under adjudication, with regard to Art. 26

paras. 1 and 2, in conjunction with Art. 4 para. 1, of the Charter, the

objective pursued by the legislature in § 6 para. 2, lit. a) of Act No.

455/1991 Sb., as amended by Act No. 167/2004 Sb., can be attained, in

the proceeding before the ordinary court from which the concrete norm

control proceeding arose, by restricting, for the purposes of the Trade

Licensing Act, the condition of irreproachability such that it is not

met only in the case of those intentional criminal offenses, whether

committed separately or concurrently with other criminal offenses, for

which was imposed a non-suspended sentence of imprisonment lasting at

least one year and whose constituent elements pertain to the object of

the entrepreneurial activity, alternatively to entrepreneurial activity

in general.