As is well known, the Gulf of Finland between Helsinki and Tallinn can be crossed by ferry in a few hours. While the journey takes longer on a private boat, it remains a favored passage for sailors and private vessel owners, especially on a sunny summer’s day. In August 2015, a Finnish citizen opted for such a tour, travelling to Estonia and back with a pleasure boat. This turned out to be a very expensive trip for the traveller. Viewed from a broader vantage, his travel has not only shaken the foundations of the Finnish sentencing system but also shed new light on the requirements of proportionality that EU law may establish on national sentencing systems more generally.
Because the boatman did not carry his passport with him, he was fined. The boatmen objected to the penal order and the case proceeded to the district court and eventually to the Supreme Court of Finland, which requested a preliminary ruling from the European Court of Justice (ECJ). In its preliminary ruling (C-35/20, A, EU:C:2021:831), the ECJ found that the Finnish day fine system constituted a disproportionate sanction due to the considerably high total monetary amount of fines, which was influenced by A’s income.
This post argues that the view on proportionality adopted by the ECJ is too narrow, and often in conflict with the broader requirements of proportionality adopted in national criminal justice systems. The proportionality of sanctions has been discussed in various ECJ rulings (see, e.g., already C-203/80, Casati, EU:C:1981:261, para 27 and C-68/88, Greek Maize, EU:C:1989:339, para 24, and more recently C-77/20, K.M., EU:C:2021:112, paras 37–38). In its case-law, the ECJ naturally assesses proportionality from the viewpoint of the objectives of EU law in question. However, proportionality of criminal sanctions is a crucial principle that safeguards the justness of criminal justice systems and is guaranteed in various national constitutions and Article 49(3) of the EU Charter for Fundamental Rights (on the history and theory behind the principle, with a visible critical undertone, see here). Whilst the ruling of the ECJ is justifiable from the point of view of EU law, its reasoning has fundamental repercussions on national criminal justice systems where proportionality is approached from a wider perspective.
Legal proceedings of the case
When the boatman returned to Finland, he underwent a border inspection. Although he owned a valid passport, he failed to present such to the authorities. He was, however, entitled to enter Finland since his identity could be confirmed using his driving license. Despite this he was issued a penal order for a petty state border offence because crossing the Finnish border without a valid identity card or passport is a criminal offence in Finland (Chapter 17, Section 1 of the Finnish Penal Code). The only available sanction for petty state border offence is a fine. The boatman was issued a 15-day fine, with the monetary amount of one day fine being 6 350 euros, based on his considerably high income. Thus, the total amount of the fine would have been 95 250 euros.
Because the boatman objected the penal order, the case eventually proceeded to the Supreme Court of Finland. The Supreme Court requested a preliminary ruling from the ECJ to verify whether the national penal provision was compatible with an EU citizen’s right to freedom of movement and whether the punishment was proportionate from the viewpoint of EU law. In May 2023, the Supreme Court of Finland delivered its precedent (KKO 2023:35, see the English summary of the case), which illustrates several points of interest from a broader EU constitutional law perspective.
In its preliminary ruling of October 2021 (C-35/20, A, EU:C:2021:831) the ECJ found that EU law, specifically the freedom of movement guaranteed for Union citizens in Article 21 TFEU and specified in Directive 2004/58/EC, does not preclude national legislation criminalising such behaviour. However, the ECJ ruled that in these circumstances, the Finnish day fine system amounted to a criminal sanction that was not proportionate to the seriousness of the offence.
The day fine system in Finland
The day fine system was adopted in Finland already in 1921, replacing the previous system of fixed fines. The objective of the day fine system was to promote equality, as the fixed fine system was seen as treating individuals with better financial positions more leniently. To address this, the system was reformed so that the total amount of the fine is always dependent on the income of the offender (see Government’s Proposal 36/1920 vp and here). Although the Finnish criminal justice system and its sanctions regime also include fixed fines for some petty offences, day fines are provided as a sanction for a significantly larger number of offences.
According to Finnish legislation, when the day fine system is applied, the total amount of the fine is assessed by sentencing the offender to between one and 120 day fines based on the blameworthiness of the act (Finnish Penal Code Chapter 2a, Section 1). The monetary amount of one day fine is set according to the solvency of the person, using the method of assessment prescribed in law (Penal Code, Chapter 2a, Section 2). There is no upper limit for either the monetary amount of one day fine or the total monetary amount of the sanction. The minimum monetary amount of a day fine is six euros. Thus, the total monetary amount of a sanction is calculated by multiplying the number of day fines by the monetary amount of one day fine. This means that if your monthly income is very high, the total amount of the fine will also be very high.
In its ruling, the Supreme Court of Finland recognized that the day fine system and the foundations on which the monetary amount of the day fine is determined belong to the fundamental principles of the Finnish criminal justice system. The system is designed to ensure that an individual’s economic situation does not affect the severity of their criminal punishment, a principle that was specifically maintained during the comprehensive reform of the Finnish Penal Code (see, e.g., Committee Report 1976:72, p. 81). The Constitutional Law Committee of the Finnish Parliament has also stressed the importance of equality in relation to monetary sanctions and noted that legislative changes that could alter the practical effect of a monetary sanction differently based on the income of the defendant are of constitutional relevance (Statement of the Constitutional Law Committee of the Finnish Parliament 30/1998 vp, p. 3).
Proportionality of the day fine system and EU law
In its preliminary ruling, the ECJ as such rightly stressed that crossing the border of the Member States without a valid travel document is a minor offence. However, the court found that when the total amount of the fine imposed from this minor offence typically consisted of 20 percent of the offender’s net monthly income, and when the total amount of the fine imposed for the defendant in the case could be 95 250 euros, the severity of the sanction exceeded what is appropriate and necessary to achieve the objective of the offence (C-35/20, A, EU:C:2021:831, paras 80–92). The ECJ acknowledged that EU law does not preclude national rules on financial penalties from taking into account a person’s ability to pay when calculating the amount of the sanction (para 91). However, it argued that when EU law is relevant in applying such sanctions, a sufficiently dissuasive penalty may be ensured by using less restrictive penalties, such as fixing fines at a lower percentage of monthly income and introducing a ceiling on the amount of fines (para 91).
With this finding, the ECJ shot an arrow to the very heart of the Finnish sentencing system and questioned one of the defining features of the Finnish day fine system. The Supreme Court of Finland must have faced a dilemma when considering how to reconcile this contradiction. On the one hand, it reiterated that the day fine system and the basic principles of calculating the monetary amount of a day fine belong to the foundations of the Finnish criminal justice system. On the other hand, it was obliged to somehow find a solution that would align the proportionality of the criminal sanction imposed with the requirements of proportionality under Directive 2004/38/EC and Article 49(3) of the Charter, as interpreted by the ECJ in its ruling.
The Supreme Court resolved the issue of proportionality in enhanced composition due to its fundamental importance. The majority was of the opinion that acceptable proportionality could be achieved by lowering the number of day fines. While the “normal punishment” for a petty state border offence had been 15 day fines, the majority lowered the number of day fines to 5. This also means – although the majority did not explicitly mention it – that the blameworthiness of a “normal” petty state border offence was significantly reduced, as there were no special mitigating circumstances in the case that would have favoured the significant lowering of the number of day fines.
This is problematic from the perspective of the principle of proportionality, as the penalty value of a petty state border offence suddenly changed. While it could be argued that the penalty value of the said offence had previously been too high, the ECJ’s proportionality assessment focused on the total amount of the fine, not on the penalty value of state border offence.
In addition, the interpretation of the majority may still be problematic considering the proportionality required by the ECJ in its ruling. Even though the majority lowered the number of day fines from 15 to 5, the total amount of the fine imposed on A was still 58 310 euros, since his average net monthly income was 700 000 euros. Therefore, from the viewpoint of EU law, the total amount of the fine might still be deemed disproportionate.
The minority, consisting of two justices, held that the interpretation adopted by ECJ was best achieved by not applying the provisions on the calculation of the monetary amount of one day fine. This would have meant that the monetary amount of one day fine would have been set by its statutory minimum of 6 euros. The total sanction for a petty state border offence would have thus been 90 euros. Therefore, the interpretation adopted by the minority could also be criticized because it contradicts the foundational objective toward equality.
EU proportionality challenging the principles of sentencing
Case C-35/20 is a good example for the foundational and partly problematic effects of EU law on national criminal law. EU instruments often contain a provision that Member States must provide “effective, proportionate and dissuasive” sanctions for breaches of the instrument. Directive 2004/38/EC, Article 36, requires that sanctions shall be “effective and proportionate”. However, the view on proportionality adopted in EU law in general and by the ECJ is a relatively narrow one and focused on the objectives of the EU instrument in question, as the case at hand effectively illustrates. In EU law there is also no metrics against which proportionality should be evaluated (the lack of metrics is, of course, a more general problem of the proportionality principle, see, e.g., here).
Proportionality of criminal sanctions is, however, a much more complex issue (see, e.g., here). In the philosophy of sentencing, proportionality has traditionally been divided into ordinal and cardinal proportionality. Ordinal proportionality means that persons convicted of crimes of comparable gravity should receive punishments of comparable gravity. Cardinal proportionality, on the other hand, deals with the overall magnitude of a penalty scale (see, e.g., here).
On the national level, the view on proportionality adopted by the ECJ affects both ordinal and cardinal proportionality: the penal value of state border crime decreases in relation to other offences that have previously seen to possess similar penal value (ordinal proportionality), and the “normal punishment” for a certain type of state border crime becomes more lenient (cardinal proportionality). Thus, the national consequences of proportionality considerations that are originally made from an EU perspective are far-reaching.
In addition, the proportionality considerations of the ECJ may lead to altering the foundations of national sentencing systems. If proportionality of criminal fines is assessed based on the total amount of the fine and if the fine is determined on the basis of the offender’s income level, this understanding of proportionality undermines the role of equality in sentencing. Given the considerable effects of case C-35/20 on the Finnish sentencing system, it is likely that the ruling will lead to more wide-reaching legislative changes, possibly resulting in the increased use of fixed fines, although the Constitutional Law Committee of the Finnish Parliament has traditionally seen such fines to be more problematic from the viewpoint of equality than the day fine system.