Background
Oleksandr Cherkasov and Sergiy Kuzin were Ukrainian pensioners who had left Donetsk because of the hostilities and registered as internally displaced persons. Beginning on 1 July 2016, Ukrainian regulations required internally displaced persons to receive pensions and other social benefits through accounts at the State Savings Bank, Oshchadbank, and to undergo periodic identification there. Pensioners without internally displaced person status remained free to receive their pensions through other banks.
The authorities suspended the applicants’ pension payments after they did not initially provide Oshchadbank account details. Kuzin opened an account in July 2016 and his payments resumed; Cherkasov opened one in December 2016 and his payments then resumed. Both ultimately received their arrears. Their domestic challenges produced differing results: lower courts initially ruled for Cherkasov, but the Higher Administrative Court rejected his claim, while Kuzin’s claim and appeal were dismissed.
The applicants argued before the European Court of Human Rights that the suspensions interfered with their possessions and that the Oshchadbank-only rule discriminated against them because of their status as internally displaced persons.
The Court’s Holding
The Court unanimously found a violation of Article 1 of Protocol No. 1 concerning the legal framework applicable before 1 January 2017. At the relevant time, the governing statute allowed a pension to be transferred to an account designated by the pensioner, while subordinate regulations required internally displaced persons to use Oshchadbank exclusively. The domestic courts did not clearly and convincingly resolve that apparent conflict, explain whether a by-law could impose the restriction, or reconcile it with the statutory grounds for terminating pension payments. The interference therefore was not sufficiently “prescribed by law.” This finding addressed the deficient pre-2017 legal framework as applied to the applicants; it did not mean that both applicants’ payments remained suspended until 1 January 2017.
The Court unanimously found no violation of Article 14 taken together with Article 1 of Protocol No. 1. Although internally displaced pensioners were treated differently from other pensioners, the distinction pursued the legitimate aim of securely and effectively administering pension payments during an exceptional period of armed conflict. Given the State’s wide margin of appreciation in social-security policy, the technical requirement to use Oshchadbank was proportionate and did not impose an excessive individual burden on these applicants.
The Court awarded each applicant EUR 800 for non-pecuniary damage and EUR 2,000 for costs and expenses, with the costs payable directly to their representatives.
Key Takeaways
- Property restrictions must rest on rules that are sufficiently clear and foreseeable; an unresolved conflict between legislation and subordinate regulations can defeat the lawfulness requirement.
- The violation concerned the quality of Ukraine’s legal framework before 1 January 2017, not a finding that both pension suspensions continued until that date.
- A payment rule may lack sufficient legal clarity under Article 1 of Protocol No. 1 without also constituting discrimination under Article 14.
Why It Matters
The judgment separates two Convention inquiries that can produce different results. Ukraine’s courts failed to resolve the legal basis for restricting internally displaced pensioners’ choice of bank, making the interference unlawful under the property guarantee. Yet the underlying distinction between displaced and non-displaced pensioners remained objectively and reasonably justified by the administrative demands created by armed conflict and mass displacement.
For practitioners, the case underscores that domestic courts must squarely address conflicts between primary legislation and implementing regulations, especially when social-security payments are suspended. It also shows that the Court will assess a measure’s legal quality independently from whether its policy rationale is proportionate and nondiscriminatory.