Trieste: decisive turn in the lawsuits about taxation and the international Free Port

by Paolo G. Parovel

Trieste, 17 September 2020. – The three lawsuits initiated by the I.P.R. F.T.T. versus the Italian Government regarding the taxation rights of Trieste and the management of its international Free Port have reached a decisive turn: the ultimate legal proof that the well-known political theses about the lack of legal existence of the Free Territory of Trieste are false.

The lawsuits of the I.P.R. F.T.T. are respectively about the verification of the general taxation system of Trieste (LINK), of the inapplicability of the Italian Value Added Tax – VAT in Trieste (LINK), and of the correct management of the international Free Port, including the illegitimacy of the recent agreements with the People’s Republic of China (LINK).

The economic and legal match opened with the three lawsuits of the I.P.R. F.T.T. – International Provisional Representative of the Free Territory of Trieste is very relevant, and the three lawsuits have already collected more than 1600 adhesions from citizens, organizations, and enterprises based in Trieste and in other States.

This is unprecedented, and the requests of the I.P.R. F.T.T. are well-grounded in law and in fact, for the reasons summarized in a specific, systematic review of the legislation on the subject (LINK).

This is why the Italian political establishment, charged with breaches of law on this subject, reacts pressing the judges to prevent them from enforcing those laws, forces the press to remain silent about the situation, and falsely claims that the Free Territory of Trieste “does not exist and never existed”.

However, the legal strategy of the I.P.R. F.T.T. allows to overcome also those surreptitious obstacles, because the legal status of the present-day Free Territory of Trieste and of its international Free Port do absolutely not depend on Italian politicians.

The legal strategy of the I.P.R. F.T.T.

The present-day Free Territory of Trieste is a small European sovereign State, with an international Free Port, it is established with the 1947 Treaty of Peace with Italy under a provisional Regime of Government, which is entrusted to the Governments of the United States of America and of the United Kingdom of Great Britain and Northern Ireland on behalf of the United Nations Security Council.

Since 1954, the primary administering British and US Governments have sub-entrusted the temporary civil administration of the present-day Free Territory of Trieste to the responsibility of the Italian Government with a specific Memorandum of Understanding, as well as entrusting NATO with its military defense.

This legal status of the present-day Free Territory of Trieste, which borders Italy since 1947 and Slovenia since 1992, has not been changed with the Italian-Yugoslav political convention of 10 November 1975, because its efficacy is specifically limited (art. 7) to the bilateral relations of the two signatories.

The legal strategy of the I.P.R. F.T.T. is based on the fact that the Italian Government could only obtain the sub-mandate of temporary civil administration of the present-day Free Territory of Trieste from the Governments of the US and of the UK and maintain it, since 1954, because the Italian legal order recognizes and enforces, since 1947, all international obligations on the subject with laws in force and upper-ranking in the hierarchy of the sources of law.

The legal force and effectiveness of those laws in the Italian legal order was once again confirmed by both the Italian Government itself with the interministerial Decree on the management of the international Free Port, issued on 13 July 2017, and by the Italian Parliament with Italian Law 205/2017 at art. 1, paragraph 66, letter b.

This means that there is no conflict of legal orders on the matter, thus the Italian bodies in charge of the administration of Trieste are bound to respect simultaneously the status of the Free Territory and of its international Free Port, the obligations arising from the sub-mandate of provisional administration, and also the Italian legislation that recognized and enforces them.

With the three lawsuits, the I.P.R. F.T.T. is thus demanding that the Italian judges serving their duties in the Court of Trieste verify and ultimately declare the legal force, prevalence, and efficacy of the laws of the Italian legal order that enforce the international obligations of the Italian Republic and of the Italian Government respectively respect to the administered, present-day Free Territory of Trieste, as well as to rule null and void all acts of the Italian administration that conflict with them.

The four possible choices of the judges

However, the judges who are asked to verify and to duly enforce the laws in force on the subject are also undergoing the illegal political pressing aiming at the opposite. And, at this point, they have four possible choices.

The first choice is, of course, to verify and enforce the law, bravely standing against the illegal pressing that aims for the opposite. But, as a matter of fact, it is a choice that in Trieste can be made very hard to make.

The second possible choice is to find procedural pretexts to avoid verifying and enforcing the law. However, by doing so, the problem is merely dumped on somebody else, because such a decision is to be impugned before the next instance of judgment.

The third choice is to outright refuse the review and enforcement of the law claiming that the source of the rights invoked, which is the Free Territory of Trieste, “does not exist and never existed”.

However, the lack of legal existence of the Free Territory of Trieste is just a false thesis developed, after 1947, by two jurists of the former fascist regime (E.M. Cammarata, M. Udina), promoted by their pupils, spread by Wikipedia, and ultimately poured in two 2013 deceptive judgments of a Regional Administrative Court (LINK).

In addition, this third choice turns into a trap, because that political thesis is based on a false description of the letter of the laws on the subject, which are not mere opinions and, instead, constitute objective, indisputable facts.

Such a decision would not be just impugned before the superior Court, but would also return to the same Court that issued it through an immediate action for annulment ex art. 395, No. 4 of the Italian Code of Civil Procedure, which means for factual error.

Yet there is also a fourth option for the judges, and maybe it is also the simplest and least embarrassing: suspending the trial and ordering the parties to seek the settlement of the dispute through the regular mediation procedures.

The problem of those four possible choices has already appeared in the first lawsuit, that on taxation rights in Trieste, initiated in 2017 and already decided in first and in second instance.

The decisive turn

Indeed, in the lawsuit about the general taxation of Trieste, both the sole judge of first instance and the Formation of the Court in second instance avoided to review and enforce the laws on the subject, picking the second and the third choices listed above.

The sole judge claimed to be procedurally unable to discuss the lawsuit in the merit because of an alleged lack of interest of the 600 plaintiffs.

On the other side, the Formation of the Court contested the lack of legal existence of the Free Territory of Trieste and, in an attempt to prove it, copy-pasted in its own judgment the false claims contained in one of the aforementioned administrative decisions.

This way, the I.P.R. F.T.T. could immediately impugn that judgment, seeking its annulment before the Court of Appeal itself on the grounds of art. 395, No. 4, of the Italian Code of Civil Procedure, which means for factual error, and even before pursuing an action before the Italian Court of Cassation.

The action for annulment is registered, since 7 August 2020, under RG 312/2020 and the first hearing is to take place on 14 December 2020. The Writ of summon, notified to all parties on 30 July, is now published at this LINK.

This means that the action for annulment won’t be about the existence of the Free Territory or lack thereof, rather, it is to revolve on the review of the aforementioned false theses, seeking if they correspond to the letter of the laws recalled or not, because, as mention above, the letter of the law is an objective, certain, and unmistakeable fact.

Consequently, the correct proceeding of the action for annulment allows to finally, lawfully demolish once and for all those false theses, preventing that they be repeated again by Italian bodies and officers in charge of Trieste’s provisional administration.

Also, the pendency of the action for annulment is already preventing those false theses from being used again to attempt stopping the legal actions of the I.P.R. F.T.T. about taxation rights in Trieste and about the management of the international Free Port.

The two legitimate choices

Indeed, finally, the judges in charge of the three lawsuits are going to be free to make one of the two duly and right choices that so far were prevented to them: either to verify and enforce the laws in force or to suspend the proceeding ordering the parties to seek the settlement of the dispute through the regular mediation procedures.

At this point, in facts, nothing prevents the parties from relieving the judges from the legal actions by deciding to peacefully agree on the most suitable way and time to re-establish the rule of law and the rights that were breached until now.

A serious and prompt agreement that settles the question is also compatible with the developing Euro-Atlantic strategic interests that involve the roles of the administered Free Territory and of its international Free Port, in particular for the consolidation of the Three Seas Initiative, which unites the European States between the Baltic, the Adriatic and the Black Sea.

Adhesions continue

In the meantime, the new adhesions of citizens, organizations, and enterprises of Trieste and of other States to the actions about the unenforceability of the Italian VAT and about the management of the Free Port are continuing. The adhesions are collected and coordinated by the secretarial office of the Free Trieste Movement in Piazza della Borsa 7 (LINK).

Author of the English version: Silvia Verdoljak.

© 17 Settembre 2020