Legal summary
October 2024
Amerisoc Center S.R.L. v. Luxembourg - 50527/20
Judgment 17.10.2024 [Section V]
Article 1 of Protocol No. 1
Article 1 para. 2 of Protocol No. 1
Control of the use of property
Lack of remedy by which to meaningfully challenge seizure of company’s Luxembourg bank assets following international request for assistance issued by Peruvian authorities: violation
Facts – On 5 December 2018 a Luxembourg investigating judge ordered a search for and the seizure of the assets in the applicant company’s bank account pursuant to a request for international mutual legal assistance issued by the Peruvian authorities. This seizure was aimed at securing the subsequent confiscation of the funds as part of the money-laundering proceedings opened by the Peruvian authorities.
Funds were seized in the amount of USD 2,605,589, which, according to the applicant company, constituted virtually all of its assets and subsequently forced it to go into debt. The applicant company pursued a number of unsuccessful remedies against this seizure before the Peruvian and Luxembourg authorities.
Law – Article 1 of Protocol No. 1:
The decision of 5 December 2018 ordering the seizure of the assets in the bank account constituted interference with the applicant company’s right to peaceful enjoyment of its possessions, which was provided for by law. In addition, it pursued a legitimate aim, as it was designed to foster cooperation between States with a view to combatting organised crime and to prevent the unlawful use, in a manner dangerous to society, of possessions the lawful acquisition of which was not established. The complaint was examined under the second paragraph of Article 1 of Protocol No. 1.
Where a seizure had been carried out by the Luxembourg authorities following a request from a foreign authority, section 9 of the Luxembourg law on international mutual legal assistance provided that the lawfulness of the proceedings was subject to systematic review. In such proceedings, the “third party concerned”, provided it had been informed of the seizure order, could submit “observations” within ten days from the date on which the bank had been notified of the order and put forward its arguments, including those aimed at recovering the frozen funds.
Matters were different if the bank chose not to disclose the existence of such an order to the client concerned. Indeed, the law on international mutual legal assistance did not provide for a compulsory mechanism to ensure that the third party concerned be informed of the request for international mutual legal assistance involving the seizure of their bank funds or assets. In such cases, the client was therefore unaware that the ten-day period for submitting observations had started to run.
The applicant company submitted that it had only learned of the seizure order after the expiry of the deadline for submitting observations. The decision of 1 February 2019 of the chambre du conseil of the Luxembourg District Court – finding that the procedure had complied with the formal requirements – had therefore been delivered without the applicant company having had the opportunity to submit observations.
When the applicant company had lodged an application for recovery of assets under section 11 of the law on international mutual legal assistance, the application had been dismissed as ill-founded. In its decision of 4 March 2020, the chambre du conseil of the District Court had found that there were no exceptional circumstances to justify even a partial release of the seized assets and that it could not examine the complaint as to the disproportionate nature of the seizure, since the procedure’s compliance with formal requirements had been established in the decision of 1 February 2019, which had been delivered without the applicant company having submitted observations raising this complaint. On 15 May 2020 the chambre du conseil of the Court of Appeal had upheld that decision.
It followed that the Luxembourg authorities had never assessed the proportionality of the measure which, by its nature and scope, appeared, on the face of it, significant and harsh and which, moreover, had been ongoing for six years.
In conclusion, at no stage of the proceedings had the Luxembourg authorities determined whether the requisite balance had been struck in a manner consistent with Article 1 of Protocol No. 1.
It was the domestic courts’ duty, however, to satisfy themselves that the freezing of the applicant company’s assets would not cause it more damage than that which inevitably flowed from such measures. The Court was certainly aware of the difficulties inherent in international cooperation. However, even where a measure had been ordered in the context of a request for international mutual legal assistance issued by another State, the national authorities had an obligation to apply those principles in substance, and to do so with regard to the particular characteristics and mechanisms of international mutual legal assistance.
In the present case, the Court could only find that the scope of the Luxembourg courts’ review had been too narrow to satisfy the requirement of seeking a “fair balance” inherent in the second paragraph of Article 1 of Protocol No. 1. This conclusion was strengthened by the fact that the issue at hand had not been examined by the Peruvian authorities either.
The above considerations were sufficient to enable the Court to conclude that the national courts had not afforded the applicant company a reasonable opportunity to put its case through adversarial proceedings.
This situation had resulted, first, from the law on international mutual legal assistance, which did not provide that information about the seizure order be communicated to the bank client concerned and, second, from the national courts’ decision not to examine the applicant’s arguments under section 11 of that law.
Having regard to all the foregoing considerations, the Court concluded that, in the present case, the seizure of the applicant company’s assets constituted an interference with its right to the peaceful enjoyment of its possessions which, in the absence of a remedy by which to challenge that measure in an effective manner, was disproportionate to the legitimate aim pursued.
Conclusion: violation (unanimously).
Article 41: claim in respect of pecuniary damage dismissed; finding of a violation sufficient in respect of non-pecuniary damage.
(See also G.I.E.M. S.r.l. and Others v. Italy [GC], 1828/06 et al., 28 June 2018, Legal Summary; Shorazova v. Malte, 51853/19, 3 Marsh 2022, Legal Summary)
© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.
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