Devekom DOO Niš v. Serbia: customs duty refunds and the right to peaceful enjoyment of possessions

Introduction

On 13 October 2026, the European Court of Human Rights (Third Section) delivered its judgment in the case of Devekom DOO Niš v. Serbia (Application no. 16947/22, ECLI:CE:ECHR:2026:1013JUD001694722). The case was brought by Devekom DOO Niš, a company registered in Niš, Serbia, and concerned the right to peaceful enjoyment of possessions as guaranteed by Article 1 of Protocol No. 1 to the Convention for the Protection of Human Rights and Fundamental Freedoms.

At its core, the case raises a question of considerable institutional and economic significance: when a state authority wrongly levies customs duties on a company and then takes nearly a decade to refund those duties, is the refusal to pay interest on the reimbursed sum compatible with the Convention? The Court's answer, as set out in this judgment, has direct implications for the obligations of Council of Europe member states in the administration of customs and tax proceedings.

Background and factual context

The applicant company imported goods from Bosnia and Herzegovina and from Croatia in 2006 under a preferential customs regime, without payment of customs duties, in accordance with the relevant domestic legislation and international agreements that were duly ratified and in force at the material time. The Niš Customs Office issued a series of declarations in that regard, covering imports made between March and October 2006.

In 2009, the first-instance customs authority initiated, on its own initiative, a post-clearance check of those declarations. It concluded that the preferential treatment should not have been applied because the imports had not met the conditions required for the granting of preferential origin. As a result, the customs authority issued twelve sets of decisions ordering the applicant company to pay customs duties on the imported goods. Those decisions were issued between 30 October and 11 November 2009.

The applicant company appealed against those decisions. However, because the appeal did not have suspensive effect under the applicable domestic procedure, the company was required to pay the amounts due immediately. The total sum collected was 7,381,148 Serbian dinars, which was approximately 78,360 euros at the time of payment.

After several remittals of the case through the domestic administrative system, the customs authorities ultimately determined that the goods imported by the applicant company were not in fact subject to customs duties. Decisions to that effect were issued on 13 November 2018 by the first-instance customs authority, ordering that the amount paid be refunded. However, those same decisions dismissed the applicant company's claim for interest on the refunded amount.

The applicant company appealed specifically against the refusal to award interest. Between 6 June and 16 July 2019, the second-instance customs authority — the Department for Second-Instance Customs Procedure within the Sector for Second-Instance Tax and Customs Procedure of the Ministry of Finance — upheld all the first-instance decisions on that point.

The legal framework: Article 1 of Protocol No. 1

Article 1 of Protocol No. 1 to the Convention protects the right to peaceful enjoyment of possessions. The Court's judgment in this case was framed around that provision, with the applicant company complaining that it had been required to bear an excessive burden as a result of the customs authorities' refusal to award interest on duties that had been wrongly levied and then reimbursed only after a considerable period of time.

The Court's summary of the legal issue, as reflected in the official case summary prepared by the Registry, identifies the key elements: the customs authorities' refusal to award interest on customs duties wrongly levied from the applicant company; the fact that those duties were reimbursed almost ten years after they had been collected; the failure to strike a fair balance between competing interests; the imposition of an individual and excessive burden on the applicant company; and the conclusion that the failure to award, at minimum, simple statutory interest deprived the applicant company of adequate and effective redress.

It is important to note that the summary prepared by the Registry expressly states that it does not bind the Court. Nevertheless, it accurately reflects the principal findings articulated in the judgment itself.

The Court's findings

The Chamber, composed of seven judges under the presidency of Ioannis Ktistakis, deliberated in private on 22 September 2026 and adopted the judgment on that date. The Court found a violation of Article 1 of Protocol No. 1 to the Convention.

Central to the Court's reasoning was the duration of the period between the collection of the customs duties and their reimbursement. The duties were collected following decisions issued in late 2009, and the refund was ordered only in November 2018 — a period of approximately nine years. During that entire period, the applicant company was deprived of the use of funds that the domestic authorities ultimately acknowledged should never have been collected.

The Court found that the domestic authorities' failure to award interest — at a minimum, simple statutory interest — on the refunded sum meant that the applicant company did not receive adequate and effective redress for the interference with its possessions. This failure, in the Court's assessment, meant that a fair balance had not been struck between the demands of the general interest and the requirements of the protection of the individual's fundamental rights. The burden placed on the applicant company was characterised as individual and excessive.

The Court's conclusion that the refusal to award even simple statutory interest was incompatible with Article 1 of Protocol No. 1 reflects a well-established principle in the Court's jurisprudence concerning the adequacy of redress in cases involving the wrongful deprivation of property or funds by state authorities. The judgment underscores that the mere return of a principal sum, without any compensation for the time value of money lost during a prolonged period of wrongful retention, may in itself constitute a disproportionate interference with the right to peaceful enjoyment of possessions.

Procedural observations

The application was lodged with the Court on 31 March 2022. The applicant company was represented by Mr N. Stanković, a lawyer practising in Niš, while the Serbian Government were represented by their Agent, Ms Z. Jadrijević Mladar.

The Court had previously decided to give notice to the Serbian Government of the complaint concerning the applicant company's right to peaceful enjoyment of its possessions and to declare the remainder of the application inadmissible. This procedural step meant that the judgment addressed only the Article 1 of Protocol No. 1 complaint, which was the sole admissible ground before the Chamber.

The judgment notes that it will become final in the circumstances set out in Article 44 § 2 of the Convention, and that it may be subject to editorial revision. Those are standard procedural qualifications that apply to Chamber judgments of the Court and reflect the possibility that a party may request referral of the case to the Grand Chamber within three months of the judgment's delivery.

Significance for customs and tax administration

This judgment carries practical significance for the administration of customs and tax proceedings within Council of Europe member states. It illustrates that where a state authority initiates post-clearance checks on its own initiative, as occurred here when the Niš Customs Office began its review in 2009, and where that process ultimately results in a finding that duties were wrongly levied, the state cannot simply return the principal sum collected without addressing the question of interest.

The case also highlights the consequences of domestic procedural rules that require immediate payment of assessed duties even where an appeal is pending and the appeal lacks suspensive effect. In this case, the applicant company was compelled to pay the assessed duties immediately in 2009 because its appeal did not suspend the obligation to pay. The eventual vindication of the company's position, nearly a decade later, without any award of interest, was found by the Court to be insufficient to discharge the state's obligations under the Convention.

The judgment does not prescribe a specific rate of interest or a particular mechanism for its calculation. What it does establish, consistently with the framing in the Registry's case summary, is that the failure to award at minimum simple statutory interest constituted the critical deficiency in the domestic redress provided to the applicant company. Member states and their customs and tax authorities should therefore ensure that their domestic legal frameworks provide for the payment of interest in cases where duties or taxes are wrongly levied and subsequently refunded after a significant period of time.

Conclusion

The judgment of the European Court of Human Rights in Devekom DOO Niš v. Serbia (Application no. 16947/22) represents a clear application of the principles governing the right to peaceful enjoyment of possessions under Article 1 of Protocol No. 1 to the Convention. The Court found that Serbia's customs authorities, by refusing to award interest on customs duties that had been wrongly levied and held for approximately nine years before being refunded, failed to strike a fair balance between the competing interests at stake and imposed an individual and excessive burden on the applicant company.

The case serves as an important reminder to public authorities that the adequacy of redress for wrongful interference with property rights must be assessed not only by reference to the return of the principal sum taken, but also by reference to the compensation owed for the period during which the affected party was deprived of the use of those funds. The failure to award, at minimum, simple statutory interest was identified by the Court as the decisive factor rendering the redress provided inadequate and ineffective.

This article is for educational and informational purposes only and does not constitute legal advice.

Sources consulted

• CASE OF DEVEKOM DOO NIŠ v. SERBIA - European Court of Human Rights, Council of Europe