Article 15 of the Constitution protects the right to work, the right to property, and the right of individuals to conduct business. As a result of the constitutional protection of the right to work, individuals may freely choose their occupations, including whether to open or close their own businesses, their business hours, their time of business, the location of their business, with whom to do business, and the manner in which to do business. The constitutional protection of the right to property allows individuals to freely conduct business—including the production, transaction, and disposition of products—without government interference (see Interpretation Nos. 514 and 606). In addition, Articles 15 and 22 both protect freedom of contract, an important mechanism for the development of personal autonomy and self-realization. Freedom of contract enables contracting parties to freely choose how and with whom to conclude contracts, and the content of the contracts. It ensures that an individual has the freedom to trade goods or services with others (see Interpretation Nos. 576 and 580). Any restrictions imposed by the state on individuals’ freedoms and rights should comply with the principle of proportionality as stipulated in Article 23. Moreover, when administrative fines are imposed upon individuals who violate their obligations under the administrative law, if it is possible and necessary to distinguish the different degrees of the seriousness of the violation, these fines should be in proportion to the seriousness of the violation, thereby making the punishment proportional to the responsibility. Legislators may punish violations of obligations under administrative law with administrative fines, but the Constitution requires that appropriate adjustment mechanisms be established to avoid punishments that are excessive in particular cases (see Interpretation No. 641).
Article 9 of the Law Prohibiting Conflicts of Interests for Civil Servants states that civil servants and persons to whom they are related, such as their family members and the corporations over which they exert control (see Articles 2 and 3 of the Law Prohibiting Conflicts of Interests for Civil Servants), may not transact business (including sales, leases, and contracts for labor) with offices (hereafter referred to as Foregoing Offices) that they work in or supervise (hereafter referred to as the First Disputed Rule). Article 15 of the Law Prohibiting Conflicts of Interests for Civil Servants, meanwhile, states that violators of Article 9 should be fined not less than the total amount of the transaction and not more than three times the amount of the transaction (hereafter referred to as the Second Disputed Rule). The First Disputed Rule restricts the right to property and the freedom to make contracts for civil servants, as well as the right of persons to whom civil servants are related to work and possess property and its components (such as freedom of business and of contract). The Second Disputed Rule, fining civil servants and persons to whom they are related for violating the First Disputed Rule, is a restriction on the right to property guaranteed under Article 15 of the Constitution.
Both the First and Second Disputed Rules were legislated for legitimate purposes, and the means adopted indeed help achieve their legislative purposes. If civil servants’ relatives or other persons to whom they are related transact business with the Foregoing Offices, these persons might compete unfairly or benefit improperly from their relationships with the civil servants. The Law Prohibiting Conflicts of Interests for Civil Servants was enacted for the purposes of promoting clean and capable politics, establishing norms to avoid conflicts of interests, and deterring corruption and the improper conferral of benefits (see Article 1 of the Law Prohibiting Conflicts of Interests for Civil Servants). The First Disputed Rule was enacted to prevent civil servants and persons to whom they are related from securing opportunities or creating conditions that are unfair or otherwise superior to those provided to other members of the public who contract with government offices. The Second Disputed Rule was enacted to ensure that civil servants and persons to whom they are related do not violate the First Disputed Rule, a goal met through the application of administrative fines. Thus, both the First and Second Disputed Rules were legislated for legitimate purposes, and the means adopted have helped to achieve these purposes.
When the Foregoing Offices need to enter into transactions (such as sales, leases, or contracts for labor), if the law does not prohibit civil servants and persons to whom they are related from contracting with the Foregoing Offices, civil servants might be tempted to utilize their official powers, opportunities, or knowledge to confer benefits improperly, creating conflicts of interest. The First Disputed Rule prohibits civil servants and persons to whom they are related from entering into such transactions, while the Second Disputed Rule imposes administrative fines on the violators of the First Disputed Rule to ensure that civil servants and persons to whom they are related do not have opportunities to confer benefits improperly and thereby create conflicts of interest. As there are no other means for achieving the same results without creating more restrictions, the First and Second Disputed Rules are the means necessary to achieving the foregoing legislative purposes.
Although the First Disputed Rule restricts the right to work, as well as the right to property and its components (e.g., the freedom of business and of contract), for civil servants and persons to whom they are related, the scope of this prohibition is limited to the Foregoing Offices. In other words, civil servants and persons to whom they are related can transact business with individual persons and legal entities that are not the Foregoing Offices. Therefore, the First Disputed Rule does not excessively restrict the right to work, the right to property, and so on of civil servants and the persons to whom they are related, and the restriction is not out of balance with the public interest. Therefore, the First Disputed Rule does not violate the principle of proportionality as provided by Article 23 of the Constitution, and it is consistent with Articles 15 and 22 of the Constitution, which protect the right to work and the right to property and its components (e.g., freedom of business and of contract).
Although the First Disputed Rule is not unconstitutional, relevant government offices should still review its appropriateness. Civil servants are obliged by law to be honest, clean, prudent, and diligent and to avoid arbitrary, corrupt, or lazy behavior that adversely affects their reputations. They are also legally obliged to recuse themselves when necessary and to avoid conferring benefits on themselves and persons to whom they are related through the application of official powers, opportunities, or knowledge. Violations of these obligations are punishable under Articles 5 and 6 of the Law on the Service of Civil Servants; under Articles 6, 7, 14, and 16 through 18 of the Law Prohibiting Conflicts of Interests for Civil Servants; and under Article 32 of the Administrative Procedure Act. In contrast, persons related to civil servants do not have the aforementioned obligations arising from a civil-servant status. Therefore, the state’s requirements for civil servants should be higher than those for persons to whom civil servants are related. If the stipulated prohibition on persons to whom civil servants are related in the First Disputed Rule could cause a monopoly of the market by a small number of market participants, the public interest would be adversely affected. In the case of a monopoly, if the Foregoing Offices have administered sufficiently open and fair procedures so as to prevent corruption, the relevant government offices should promptly review whether it is still necessary to prohibit persons to whom civil servants are related from transacting business with the government offices where civil servants work.
The judiciary has discretion that helps it to ensure that punishments are proportional to the seriousness of a violation. Violators can be fined no less than the amount of the law-breaking transaction and, at most, three times the amount of the law-breaking transaction. However, the amount of the law-breaking transaction is usually far greater, or several times greater, than the amount of the benefits that arise from the transaction itself. For example, the amount of a transaction related to a significant construction project is usually so large that even the minimum administrative fine is likely to be beyond the ability of the punished person to pay. In other words, the Second Disputed Rule may result in a punishment that is excessive in some cases. Since legislators have failed to establish proper adjustment mechanisms, punishments may exceed the extent necessary, which is inconsistent with the constitutional principle of proportionality (Article 23) and the constitutional protection of individuals’ right to property (Article 15). Therefore, the Second Disputed Rule should become invalid no later than one year from today.
The applicants applied for the constitutional interpretation of two additional issues. First, they alleged that Article 2 of the Law Prohibiting Conflicts of Interests for Civil Servants (hereafter referred to as the Third Disputed Rule) was too wide in scope and therefore violated the constitutional principle of proportionality. Second, they alleged that Letter Ruling Fa Zheng Jue Zi No. 0930041998, issued by the Ministry of Justice on November 16, 2004, violated the following constitutional principles: of equality and proportionality, the minimum requirement for clarity, the protection of reliance on existing law (Vertrauenschutz in German), and the prohibition against ex post facto rules. Their allegations—that the Third Disputed Rule and the Letter Ruling violated constitutional principles—are, in effect, disputing the propriety of fact finding and legal analysis by the court, instead of noting how the Third Disputed Rule and the Letter Ruling objectively violated the Constitution. Therefore, the applications do not satisfy the requirements set out by Article 5, Section 1, Paragraph 2 of the Law Governing Adjudication by the Grand Justices of Judicial Yuan and, therefore, should be dismissed pursuant to Article 5, Section 3 of the same law.
＊ Translated by Chi CHUNG.