AEI INVESTMENT INDUSTRY S.R.L. AND OTHERS v. ROMANIA

FOURTH SECTION

DECISION

Application no. 17910/15
AEI INVESTMENT INDUSTRY S.R.L. against Romania
and 6 other applications
(see list appended)

The European Court of Human Rights (Fourth Section), sitting on 11 February 2020 as a Committee composed of:

Faris Vehabović, President,
Iulia Antoanella Motoc,
Carlo Ranzoni, judges,
and Ilse Freiwirth, Deputy Section Registrar,

Having regard to the above applications lodged on 10 April 2015,

Having deliberated, decides as follows:

THE FACTS

1.  A list of the applicants is set out in the appendix. Ms Niculina Iancu is married to A.M.I., one of the defendants in the criminal proceedings detailed in paragraph 4 below; and Mr Alexandru Emilian Iancu is A.M.I.’s son. The applicant companies, AEI Investment Industry S.R.L., Balkan Petroleum A.G., Balkan Petroleum S.A. and B.K.P. Management & Invest Group S.A., are managed by Mr Alexandru Emilian Iancu. The applicant company Pro Domo S.R.L. is owned by O.I., another defendant in the criminal proceedings detailed below.The circumstances of the case

2.  The facts of the case, as submitted by the applicants, may be summarised as follows.

3.  By a decision of the prosecutor’s office attached to the High Court of Cassation and Justice of 29 September 2005, nine people, including O.I. and A.M.I., were tried for tax evasion and conspiracy to commit money laundering in the context of the privatisation of several State‑owned companies.

4.  On 28 November 2011 the Bucharest County Court convicted the defendants, including O.I. and A.M.I., of several counts of tax evasion and money laundering. Jointly with other co-defendants, O.I. and A.M.I. were ordered to pay the equivalent of several billion euros in respect of damage caused to the State budget by their criminal activity. In order to recover the damages, the court decided to uphold seizure measures previously put in place in respect of the defendants’ assets by a prosecutor’s decision of 12 January 2005 and a court order of 20 May 2010.

5.  All defendants appealed against that judgment to the Bucharest Court of Appeal.

6.  At a hearing on 15 September 2014 the Bucharest Court of Appeal allowed an application by the prosecutor under Article 249 §§ 1 and 4 of the Code of Criminal Procedure (“the CCP”) to extend the seizure measures so that they would relate to all the proceeds derived directly from the crimes for which the defendants had been tried. Those included the assets belonging to relatives of the defendants or to other third parties, found in Romania or abroad. The court held that confiscation of the proceeds of crime was an obligation provided for by the law in cases of money laundering and tax evasion. The court further held that, in view of the extensive damage allegedly caused by the crimes for which the defendants had been tried, those preventive measures were necessary to prevent them from hiding, destroying or selling assets which might serve to cover that damage. The court further ordered that assets which might be subject to seizure be identified, and that their owners be summoned to appear before the court in order to protect their rights under the civil limb of Article 6 § 1 of the Convention and under Article 1 of Protocol No. 1.

7.  At the next hearing on 19 September 2014 the court asked the prosecutor’s office for a full update on the enforcement of the seizure measures.

8.  At the hearing on 1 October 2014 the applicant in application no. 18316/15 (Alexandru Emilian Iancu v. Romania), who was present as a third‑party intervener and was represented by a lawyer of his choice, was heard in connection with the seizure measures. The court acknowledged that he was present at the hearing in his own name as well as on behalf of the applicant companies in applications nos. 17958/15 (Balkan Petroleum S.A. v. Romania) and 21008/15 (BKP Management & Invest Group S.A. v. Romania). He contended that all his personal assets, as well as the assets belonging to the companies he managed, had been acquired lawfully and had no connection with the crimes under examination.

9.  The defendant A.M.I. was also heard and submitted arguments as regards the seizure of assets from the applicant companies Balkan Petroleum A.G. and Balkan Petroleum S.A., which he was also representing before the court.

10.  All documents concerning the seized assets were made available to the parties, who were informed that anyone interested could lodge complaints against the seizure measures. For this purpose, the Bucharest Court of Appeal ordered that a list of the immovable property which had been seized be sent to the National Property Registration Office (Agenţia Naţională de Cadastru şi Publicitate Imobiliară) and to the Commercial Companies Office (Oficiul Naţional al Registrului Comerţului), in order for the seizure measures to be registered in the land registry and the commercial companies’ registry and become public. The list included numerous industrial buildings, houses, apartments and plots of land, some of which belonged to the applicants. The court also informed the parties that the seizure measures also concerned various bank accounts in Romania and abroad, shares in commercial companies, and cars belonging to the applicants, all of which were mentioned in the report of the hearing.

11.  At the same hearing, the court informed the defendants and the other parties present about the necessity to notify all the owners of assets subject to seizure so that they could defend their rights if they so wished. Another hearing was scheduled for 9 October so that the seizure measures could be publicised (see paragraph 9 above) and all those with an interest in the relevant property could come forward and be heard. The applicant in application no. 18308/15 (Niculina Iancu v. Romania) and the applicant company in application no. 18290/15 (Pro Domo S.R.L. v. Romania), who had lodged written complaints against the seizure measures, were summoned to appear at the next hearing.

12.  At the next hearing, which took place on 9 October 2014, the applicant Niculina Iancu and the applicant company in application no. 17910/15 (AEI Investment Industry S.R.L. v. Romania) were represented by a lawyer of their choice. The applicant company submitted, through its representative, a written complaint against the seizure measure, claiming that the property affected by the measure had been lawfully acquired. It also submitted documents in support of those allegations. The defendants A.M.I. and O.I. submitted documents to prove that the assets seized from all applicant companies had been acquired lawfully and there was no connection between the property of those companies and the crimes under examination. They, therefore, asked the court to lift the measures as being wrongfully ordered against the assets of the applicant companies.

13.  The court postponed the pronouncement of the judgment in order to allow the submission of written comments to the file by all interested parties.

14.  On 14 October 2014 the Bucharest Court of Appeal adopted a final judgment in the case. In an extensively reasoned judgment of 276 pages, in which all the evidence – including expert reports, documents, numerous witness statements and transcripts of phone conversations – was thoroughly examined, the court upheld the defendants’ convictions for the crimes with which they had been charged.

15.  The court also decided to maintain the seizure measures. In this regard, it observed that the defendants had committed crimes which had resulted in serious financial losses to the State budget. It held that there was ample evidence proving that O.I. and A.M.I. had invested the direct proceeds of those crimes in various properties bought in the name of their relatives or on behalf of commercial companies managed by their relatives, including the applicants. The court further held that the applicants Alexandru Emilian Iancu and Niculina Iancu, who were relatives of the defendants and who had been present before the court, had been unable to justify their contention that they had acquired the seized assets lawfully. Nor had it been proven, from the documents submitted by the parties, that the applicant companies AEI Investment Industry S.R.L., Balkan Petroleum A.G., Balkan Petroleum S.A. and B.K.P. Management & Invest Group S.A. – administered by the applicant Alexandru Emilian Iancu but in fact controlled by the defendant A.M.I. – and Pro Domo S.R.L., which belonged to the defendant O.I., had acquired lawfully the assets seized from them. In reply to the arguments raised during the proceedings (see paragraphs 8, 10 and 11 above), the court held that the procedure for putting in place the seizure measures had been in accordance with the law and that the procedural rights of all interested parties had been respected. Moreover, the relevant land registration authorities and the registry of commercial companies had been notified of the measures, and the owners of the seized property had been summoned to appear before the court and had made full use of their procedural rights. In addition, the court held that the seizure of direct proceeds of crime, like the seizure in the current proceedings, was in full compliance with the national legal framework on seizure and with the Constitution.Relevant domestic law and international documents

16.  A detailed description of the domestic law and practice and international documents concerning the seizure and confiscation of proceeds of crime can be found in Telbis and Viziteu v. Romania (no. 47911/15, §§ 35-44, 26 June 2018).

COMPLAINTS

17.  The applicants complained under Article 6 § 1 of the Convention that the proceedings which had culminated in the seizure of their assets had been unfair. Under the same Article, they also complained that the panel of judges examining their appeal had not been impartial.

18.  The applicants in applications nos. 17910/15, 17953/15, 17958/15, 18290/15 and 21008/15 also complained under Article 7 of the Convention that the penalty instituted against them had no basis under domestic law.

19.  Relying on Article 13 of the Convention, the applicants complained that they did not have access to two levels of jurisdiction in the proceedings which had resulted in the seizure of their assets.

20.  The applicants also complained that the seizure of their property without sufficient procedural guarantees had been in breach of Article 1 of Protocol No. 1 to the Convention.

21.  Under Article 17 of the Convention, the applicants in applications nos. 18308/15 and 18316/15 complained that the Bucharest Court of Appeal had relied on the provisions of Articles 6 and 13 of the Convention and Article 1 of Protocol No. 1 to the Convention in order to justify the lawfulness of the seizure measures, which had in fact been unlawful.

THE LAWJoinder of the applications

22.  Given the factual and legal similarities of the applications, the Court decides to order their joinder (Rule 42 § 1 of the Rules of Court).Complaints under Article 6 § 1 of the Convention (all applications)

23.  The applicants complained of a breach of their rights under Article 6 § 1 of the Convention, the relevant parts of which read as follows:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by an ... impartial tribunal ...”Fairness of the proceedings

24.  The applicants complained that the proceedings finalised with the judgment of 14 October 2014 (see paragraphs 14 and 14 above) had not been fair because the Bucharest Court of Appeal had ordered the seizure of their assets without their being informed of the evidence or elements justifying those measures, and without their having had an opportunity to defend their rights in the framework of the criminal proceedings against O.I. and A.M.I.

25.  The Court reiterates its well-established case-law to the effect that in cases involving the seizure and confiscation of applicants’ property in the framework of criminal proceedings against third parties, such measures constitute an interference with the applicants’ right to the peaceful enjoyment of their possessions. As property rights are civil rights within the meaning of Article 6 § 1 of the Convention, that provision is applicable under its civil head (see Silickienė v. Lithuania, no. 20496/02, §§ 45-46, 10 April 2012, and Yldirim v. Italy (dec.), no. 38602/02, ECHR 2003-IV).

26.  The Court has previously examined the Romanian legal framework on the issue of seizure and confiscation from third parties and found it to be in compliance with the fair trial guarantees set out in Article 6 § 1 of the Convention (see Telbis and Viziteu v. Romania (no. 47911/15, §§ 53-58, 26 June 2018). In this regard, the Court has held that the domestic legislation gives third parties the opportunity, if they so wish, to fully participate in the proceedings in which a seizure or confiscation measure is decided (ibid., § 54).

27.  Turning to the current case, the applicant companies AEI Investment Industry S.R.L. and Pro Domo S.R.L. and the applicant Niculina Iancu were accepted as parties to the criminal proceedings against O.I. and A.M.I. (see paragraph 10 above). They were represented by a lawyer of their choice and submitted written and oral complaints against the seizure measures, as well as written evidence (see paragraphs 10 and 11 above; compare and contrast Silickienė, cited above, § 48, where the applicant was not a party to the criminal proceedings at all). The applicant Alexandru Emilian Iancu had also been accepted as a party to the proceedings in his own name and on behalf of the applicant companies Balkan Petroleum S.A. and B.K.P. Management & Invest Group S.A. He was represented by a lawyer of his choice and submitted oral and written arguments against the seizure (see paragraph 8 above). Lastly, the applicant company Balkan Petroleum A.G. had its interests defended by the defendant A.M.I., who was its representative before the domestic court (see paragraph 9 above). Therefore, the Court notes that the documents in the file indicate that the applicants had ample opportunity to present their arguments on points of fact and law before the court, both in writing and orally at hearings (see paragraphs 8-12 above). The domestic court duly examined and responded to the their arguments in the light of the supporting evidence available in the case file and concluded that the seized assets formed part of the direct proceeds of O.I.’s and A.M.I.’s criminal activity, and that the applicants had not shown that those assets had been lawfully acquired (see paragraphs 14-15 above).

28.  In the light of the above, the Court considers that the Romanian authorities afforded the applicants reasonable and sufficient opportunity to adequately protect their interests. It follows that this complaint is manifestly ill‑founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.Impartiality of the Court of Appeal

29.  The applicants alleged that the panel of judges that had ordered the seizure of their assets had lacked impartiality. The Court notes that there is no evidence in the file that the applicants ever applied to the Bucharest Court of Appeal for the recusal of the panel in question.

30.  In view of the above, the Court finds that this complaint is inadmissible for non-exhaustion of domestic remedies and must be rejected in accordance with Article 35 §§ 1 and 4 of the Convention.Lack of access to two levels of jurisdiction

31.  Relying on Article 13 of the Convention, the applicants also complained that they had not had access to two levels of jurisdiction in the proceedings which had resulted in the seizure of their assets.

32.  The Court reiterates that by virtue of the iura novit curia principle, it is not bound by the legal grounds adduced by the applicants under the Convention and the Protocols thereto and has the power to decide on the characterisation to be given in law to the facts of a complaint by examining it under Articles or provisions of the Convention that are different from those relied upon by the applicants (see Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, § 126, ECHR 2018). Having regard to the nature and the substance of the applicants’ complaints, the Court considers that they fall to be examined under Article 6 § 1 of the Convention.

33.  The Convention does not guarantee a right to two degrees of jurisdiction in civil matters. In fact, since it does not provide any right to an appeal in civil cases, Article 6 § 1 does not require States to set up courts of appeal or of cassation (see Mugliett v. Malta (dec.), no. 46661/12, § 37, 28 May 2013).

34.  It follows that this part of the applications is incompatible ratione materiae with the provisions of the Convention, and must be rejected under Article 35 §§ 3 and 4 of the Convention.Complaint under Article 7 of the Convention (applications nos. 17910/15, 17953/15, 17958/15, 18290/15 and 21008/15)

35.  The applicant companies in applications nos. 17910/15, 17953/15, 17958/15, 18290/15 and 21008/15 complained that the seizure of their assets had constituted a penalty imposed on them without a basis under domestic law. They relied on Article 7 of the Convention, the first paragraph of which provides:

“No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed.”

36.  The Court must first determine whether the measure in question constituted a “penalty” within the meaning of Article 7 § 1 of the Convention. The wording of that provision indicates that the starting point in any assessment of the existence of a penalty is whether the measure in issue is imposed following conviction for a “criminal offence” (see Welch v. the United Kingdom, 9 February 1995, § 28, Series A no. 307‑A).

37.  In the present case the applicant companies had not previously been found guilty of any criminal offence by the Romanian courts. Moreover, the Court has found that the proceedings relating to the seizure of the assets in question did not concern a “criminal charge” against the applicant companies (see paragraph 25 above).

38.  Accordingly, it cannot be concluded that the seizure in issue involved a finding of guilt subsequent to a criminal charge; it therefore did not constitute a “penalty” within the meaning of Article 7 of the Convention (see Yildirim v. Italy (dec.), no. 38602/02, § 3, ECHR 2003‑IV). That provision is accordingly not applicable in the case.

39.  It follows that this part of the applications is incompatible ratione materiae with the provisions of the Convention, and must be rejected under Article 35 §§ 3 and 4 of the Convention.Complaint under Article 1 of Protocol No. 1 to the Convention (all applications)

40.  The applicants further argued that the seizure of their property without their having been convicted of any offence, and without sufficient procedural guarantees, had been in breach of Article 1 of Protocol No. 1 to the Convention, which reads as follows:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

41.  The Court has already examined similar complaints and found them to be in compliance with the provisions of Article 1 of Protocol No. 1 to the Convention (see Telbis and Viziteu, cited above, §§ 72-82).

42.  In the current case, the measures adopted with respect to the applicants’ assets constituted control of the use of property within the meaning of the second paragraph of Article 1 of Protocol No. 1 to the Convention (ibid., §§ 69 and 72). The Court notes that the measures were prescribed by law, since they were ordered under Article 249 §§ 1 and 4 of the CCP (see paragraph 6 above). Furthermore, it considers that the measure in question, namely the seizure of property obtained through crime, was in line with the general interests of the community (see Veits v. Estonia, no. 12951/11, § 73, 15 January 2015).

43.  The Court therefore needs to examine whether a fair balance was struck between the legitimate aim and the applicants’ fundamental rights, and whether there were sufficient procedural guarantees in place.

44.  In this connection, the Court firstly notes that the proceedings in which the seizure measure was decided formed part of a policy aimed at the prevention of crime, in relation to which the States enjoy a wide margin of appreciation both with regard to the existence of a problem affecting the public interest which requires measures of control and the appropriate way to apply such measures (see Arcuri and Others v. Italy (dec.), no. 52024/99, ECHR 2001-VII).

45.  The Court considers that its findings in respect of Article 6 § 1 (see paragraphs 25-28 above) are also relevant in the context of Article 1 of Protocol No. 1 as regards the question of whether the domestic proceedings afforded the applicants a reasonable opportunity to put their case to the authorities in order to effectively challenge the measures in question (see Telbis and Viziteu, cited above, § 78). On this point, the Court attaches importance to the fact that all those applicants who owned property subject to seizure at the time of the adoption of the measure were able to present their arguments in person and/or through legal representatives of their choice (see paragraphs 8, 10 and 11 above). In addition, the domestic court dealt with – and rejected with sufficient reasoning – the applicants’ arguments to the effect that the property in question had not been obtained through the proceeds of crime.

46.  The Court thus finds that there is nothing in the proceedings to suggest either that the applicants were denied a reasonable opportunity to put forward their case or that the domestic court’s findings were tainted with arbitrariness. The seizure measure was applied by the domestic court on the basis of evidence showing that the assets in question had illicit origins and on the applicants’ inability to prove the contrary (see paragraphs 14-15 above; see also, mutatis mutandis, Telbis and Viziteu, cited above, § 79).

47.  Having regard to the above considerations, and in particular the way in which the domestic court assessed the case, the Court finds that the proceedings in the present case cannot be considered to have been arbitrary. Having regard to the wide margin of appreciation enjoyed by States in the pursuit of a policy designed to combat crime, and to the fact that the domestic court afforded the applicants a reasonable opportunity to put their case through adversarial proceedings, the Court concludes that the interference with the applicants’ right to the peaceful enjoyment of their possessions was not disproportionate to the legitimate aim pursued (see, mutatis mutandis, Telbis and Viziteu, cited above, § 81, and Bongiorno and Others v. Italy, no. 4514/07, §§ 44-51, 5 January 2010).

48.  It follows that this complaint must be rejected as manifestly ill‑founded, in accordance with Article 35 §§ 3 and 4 of the Convention.Complaint under Article 17 of the Convention (applications nos. 18308/15 and 18316/15)

49.  Lastly, the applicants in applications nos. 18308/15 and 18316/15 complained that the Bucharest Court of Appeal had relied on the provisions of Articles 6 and 13 of the Convention and Article 1 of Protocol No. 1 to the Convention in order to justify the lawfulness of the seizure measure, in breach of Article 17 of the Convention, which reads as follows:

“Nothing in [the] Convention may be interpreted as implying for any State, group or person any right to engage in any activity or perform any act aimed at the destruction of any of the rights and freedoms set forth herein or at their limitation to a greater extent than is provided for in the Convention.”

50.  The Court observes that Article 17 of the Convention can only be applied in conjunction with the substantive provisions of the Convention. In so far as it refers to the State, Article 17 has been relied on in alleging that a State has acted in a manner aimed at destroying the rights and freedoms set forth in the Convention or limiting them to a greater extent than is provided for in the Convention (see Mozer v. the Republic of Moldova and Russia [GC], no. 11138/10, § 226, 23 February 2016).

51.  The Court considers that the complaint, as formulated by the applicants, alleging a breach of Article 17 precisely on account of the respondent State’s requisite verification of the compliance of the measures adopted at domestic level with Articles of the Convention, falls outside the scope of that Article. In any case, the Court finds no evidence to suggest that the respondent State set out to deliberately destroy any of the rights relied on by the applicants in the present case, or to limit any of these rights to a greater extent than is provided for in the Convention.

52.  It follows that this complaint is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.

For these reasons, the Court, unanimously,

Decides to join the applications;

Declares the applications inadmissible.

Done in English and notified in writing on 5 March 2020.

Ilse FreiwirthFaris Vehabović
Deputy RegistrarPresident

APPENDIX

No.

Application no.

Lodged on

Applicant

Date of Birth

Place of Residence

Nationality

Represented by

1

17910/15

10/04/2015

AEI INVESTMENT INDUSTRY S.R.L.

Bucharest

Romanian

Alexandru Emilian IANCU

2

17953/15

10/04/2015

BALKAN PETROLEUM A.G.

Switzerland

Swiss

Alexandru Emilian IANCU

3

17958/15

10/04/2015

BALKAN PETROLEUM S.A.

Bucharest

Romanian

Alexandru Emilian IANCU

4

18290/15

10/04/2015

PRO DOMO S.R.L.

Bucharest

Romanian

Radu Adrian ACHIM

5

18308/15

10/04/2015

Niculina IANCU

13/05/1964

Bucharest

Romanian

Maria Carolina NIŢĂ

6

18316/15

10/04/2015

Alexandru Emilian IANCU

09/03/1992

Bucharest

Romanian

Maria Carolina NIŢĂ

7

21008/15

10/04/2015

B.K.P. MANAGEMENT & INVEST GROUP S.A.

Bucharest

Romanian

Alexandru Emilian IANCU

 

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