Too much power to the IRS in inspections: Strasbourg again rejects Italia

Italian legislation on tax inspections is seriously starting to falter under the blows of the judgments of the European Court of Human Rights judges. After the Italgomme pilot case and less than two months after the Ferrieri and Bonassisa ruling on financial investigations, the Strasbourg judges again rejected Italia, this time on a case concerning access to premises for mixed use. In practice, the inspection had taken place at the registered office of the appellant company, which was at the same time the residence of its legal representative (the second appellant in the case decided by the Edu Court). A rejection that also brought with it an order to pay EUR 7,600 in compensation for moral damage. All in the same vein as two lawyers from Foggia, Cristiano Stasi and Ornella Bonassisa, together with their team of colleagues (in the last litigation the legal representative was assisted by Federica Caroprese).

In their reasoning, the judges emphasise what they had already reiterated in the Italgomme judgment, namely that "the domestic legal framework does not provide sufficient procedural safeguards" in particular to the extent that the contested procedures "are not subject to effective a posteriori judicial review of their legality, necessity and proportionality". Also in light of this, "the Government's preliminary objection concerning the failure to exhaust domestic remedies must be rejected."

In the specific case of the ruling of 5 March (Edilsud and Ferreri v. Italia), it differs from the Italgomme ruling in that the registered office of the appellant company was at the same time the residence of its legal representative, who is also the second appellant. Therefore, the authorisation of the Prosecutor was necessary. But in their reconstruction, the Edu judges first of all observe that, although in the present case it was authorised by a public prosecutor because of the cumulative function of the premises as business premises and private residence, such authorisation 'does not have to be substantiated' and is therefore considered a mere procedural requirement. In that respect, this authorisation is 'comparable to that issued by the chief of the tax police or the tax office, which the Court has already held to be inadequate in the Italgomme case' In fact, national legislation only requires a statement of reasons when the public prosecutor authorises the measure in question in respect of private dwellings that are not at the same time business premises.

The problem therefore lies in the recognised safeguards. "Ex post facto remedies before the tax or civil courts cannot be regarded as effective remedies for the reasons set out in the Italgomme case" and "therefore do not constitute remedies to be exhausted". Nor, the Strasbourg judges conclude, has the Government pointed to any new domestic law or decision challenging those findings.