Assessment of the likelihood of a security risk
A. Regarding an entrepreneur’s security reliability
Security clearances for business owners are governed by Section 43 et seq. of Act No. 216/2004 Coll. on the Protection of Classified Information (hereinafter referred to as the “Act”), and the National Security Authority (hereinafter referred to as the “NSA”) is the competent administrative authority for issuing industrial security clearances.
One of the criteria for issuing an industrial security clearance to a business operator is the verification of security reliability pursuant to Section 46(c) of the Act.
A business operator is thus considered security-reliable if no security risk was identified during the security clearance process.
An illustrative list of possible types of security risks is provided in Section 49(2) of the Act; among the broadest definitions of security risks, we consider Section 49(2)(a) of the Act, which defines a security risk as “conduct contrary to the interests of the Slovak Republic in the areas of national defense, national security, international relations, the economic interests of the state, the functioning of a state authority, or contrary to interests that the Slovak Republic has undertaken to protect.” These may also include, for example, violations of tax regulations.
The National Security Authority (NBÚ) also classifies the identification of a businessperson as one of a group of individuals suspected of committing an economic crime as an act against the interests of the Slovak Republic in the area of the state’s economic interests.
However, such a person is not a party to criminal proceedings (they only become one upon the filing of charges) and therefore does not have access to means of defense against such designation in criminal proceedings, which may also affect their security clearance status.
It is precisely in these situations, however, that it is essential for the National Security Authority (NBÚ) to provide the opportunity to defend against such designation; otherwise, the boundary of legality is blurred, and this opens the door to arbitrary decisions by the NBÚ to the detriment of the entrepreneur.
B. Assessing Security Risks for Business Owners
According to the case law of the Supreme Court of the Slovak Republic [1] the mere suspicion of the existence of a security risk (suspicion of a violation of the law) is also considered a security risk (resulting from a violation of the law).
An essential aspect of identifying a security risk based on a suspicion of its existence is conducting a “Probability Test,” a concept established by the Supreme Court of the Slovak Republic in its case law [2].
A probability test primarily consists of the following phases:
- the formulation of the National Security Authority’s preliminary opinion regarding the possible existence of a security risk, based on the Authority’s preliminary factual findings;
- providing sufficient opportunity for the entrepreneur to present their own explanation regarding the NSA’s preliminary factual findings, from which the NSA infers the likelihood of a security risk;
- a factual comparison of the NSA’s preliminary opinion and the explanations provided by the entrepreneur;
- evaluation of the most probable version, taking into account both the NSA’s preliminary factual findings and the entrepreneur’s explanations, together with supplementary evidence, for the purpose of reliably establishing the facts in accordance with the principles of administrative law [3].
This legal interpretation is also based on the case law of the Supreme Administrative Court of the Czech Republic [4].
C. Suspicion of a Criminal Offense as a Security Risk
As part of its legal advisory services in this area, including representation in administrative proceedings, LEGATE defended a client in a similar case before the National Security Authority (NBÚ), the Committee of the National Council of the Slovak Republic for the Review of NBÚ Decisions (hereinafter referred to as the “Committee”), and the Supreme Administrative Court of the Slovak Republic.
In the administrative proceedings, the NBÚ and the Committee held that the suspicion of having committed a criminal offense constituted grounds for revoking the industrial security clearance issued under the Act.
In proceedings before the Supreme Administrative Court of the Slovak Republic [5], we, the adjudicating panel, were convinced that: “If the first-instance administrative authority was of the opinion that, in relation to the act that led to the initiation of criminal proceedings, the plaintiff or persons acting on his behalf engaged in conduct contrary to the economic interests of the state, the first-instance administrative authority was required to prove such conduct.”
Furthermore, the Supreme Administrative Court of the Slovak Republic delved deeper into its reasoning and concluded: “Assuming an interpretation of the law in the manner set forth in the defendant’s decision, the standard of proof regarding the security risk would be set so low that decisions on security clearance could lead to arbitrariness without the establishment of clear criteria. If the plaintiff is acting against the interests of the Slovak Republic, such conduct must be specifically identified. The mere possibility that, in the future, charges may be brought against the plaintiff or other persons acting on the plaintiff’s behalf based on an ongoing criminal investigation is insufficient to establish a security risk.”
We consider the aforementioned opinion to be exceptionally significant, among other things, from the perspective of a supplementary interpretation of the criteria of the “Probability Test,” which has not yet been addressed in the case law of the Supreme Administrative Court of the Slovak Republic.
In the case at hand, the court also took into account the fact that criminal proceedings lasting more than five years in this context significantly weaken the argumentative basis of the National Security Authority and the Committee.
It is therefore important that, in cases where the fulfillment of the objectives of the law on the protection of national interests entrusts a higher degree of discretion to administrative authorities, decisions be particularly well-reasoned and comprehensive.
The fine line between the legality and arbitrariness of a decision imposes an obligation on the administrative authority to properly address not only the suspicion itself, but also its relevance (from the perspective of assessing the likelihood of a security risk) and the degree of relevance of the security risk.
D. Conclusion
A suspicion of a criminal offense without formal charges having been filed does not, in and of itself, establish either the likelihood of a security risk or the actual existence of such a risk.
In order to revoke an industrial security clearance based on a suspicion of a security risk, the National Security Authority must conduct a thorough and reliable investigation of the facts, including, among other things, through a “Probability Test.”
Poznámky:
[1] See, for example, the decisions of the Supreme Court of the Slovak Republic, Case No. 2 Sž/7/2016 dated June 20, 2019, Case No. 10 Snr/1/2017 dated September 27, 2017, Case No. 3 Snr/1/2017 dated May 16, 2019, and Case No. 2 Snr/1/2016 dated June 20, 2019;
[2] Decision of the Supreme Court of the Slovak Republic, Case No. 10 Snr/1/2017, dated September 27, 2017;
[3] See the decision of the Supreme Court of the Slovak Republic, Case No. 1Sžr/68/2011, dated March 27, 2012;
[4] See, for example, the decision of the Supreme Administrative Court of the Czech Republic, Case No. 7 As 31/2011 – 101, dated November 25, 2011;
[5] See the Judgment of the Supreme Administrative Court of the Slovak Republic, Case No. 12 Snr/1/2021, dated May 15, 2023;
