THIRD SECTION
CASE OF LYAPCHEV AND OTHERS v. BULGARIA
(Applications nos. 75478/13 and 30713/15)
JUDGMENT
STRASBOURG
2 March 2023
This judgment is final but it may be subject to editorial revision.
In the case of Lyapchev and Others v. Bulgaria,
The European Court of Human Rights (Third Section), sitting as a Committee composed of:
Darian Pavli, President,
Ioannis Ktistakis,
Andreas Zünd, judges,
and Viktoriya Maradudina, Deputy Section Registrar,
Having deliberated in private on 2 February 2023,
Delivers the following judgment, which was adopted on that date:
PROCEDURE
1. The case originated in applications against Bulgaria lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on the various dates indicated in the appended table
2. The Bulgarian Government (“the Government”) were given notice of the applications.
THE FACTS
3. The list of applicants and the relevant details of the applications are set out in the appended table.
4. The applicants complained of the forfeiture of alleged proceeds of crime.
THE LAW
JOINDER OF THE APPLICATIONS5. Having regard to the similar subject matter of the applications, the Court finds it appropriate to examine them jointly in a single judgment.
ALLEGED VIOLATION OF ARTICLE 1 of Protocol No. 16. The applicants complained of the forfeiture of alleged proceeds of crime. They relied, expressly or in substance, on Article 1 of Protocol No. 1, 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.”
7. The Government, without providing any further details, invited the Court to decide the cases on the basis of the leading judgment Todorov and Others v. Bulgaria (nos. 50705/11 and 6 others, 13 July 2021).
8. That judgment concerned the forfeiture of alleged proceeds of crime under the same legislation as applied in the case at hand, namely the Forfeiture of Proceeds of Crime Act 2005 (hereinafter “the 2005 Act”).
9. In Todorov and Others (cited above, §§ 200-09) the Court identified some potential flaws in the 2005 Act and in the manner in which it had been applied. It highlighted in this respect the combined effect of the wide scope of its application – as to predicate crimes and as to the periods for which the defendants’ revenues and expenses were being checked, the difficulties for defendants to prove what the courts considered “lawful” income during such a period, marked, moreover, by inflation and economic changes, and the presumption that any asset not shown to have had a “lawful” provenance was the proceed of crime. The Court’s position was that, while these potential flaws were not sufficient to render each forfeiture under the 2005 Act contrary to Article 1 of Protocol No. 1, they certainly placed a considerable burden on defendants in forfeiture proceedings and could tilt the balance in favour of the State. Thus, as a counterbalance and a guarantee of the applicants’ rights, it was crucial that the national courts established a causal link between the assets for which forfeiture was being sought and the criminal conduct of the defendants.
10. Applying these requirements to the specific cases examined in the leading judgment, the Court found a violation of Article 1 of Protocol No. 1 in those of them where the national courts had failed to justify the existence of the causal link defined above, and had ordered forfeiture relying on the above-mentioned presumption contained in the 2005 Act and on discrepancies between the applicants’ expenses and their “lawful” income during the relevant periods (see §§ 217-50 of the judgment).
11. As to the two cases under examination in the present judgment, in the case of Lyapchevi the national courts ordered the forfeiture of assets acquired before Mr Lyapchev had committed the predicate offence, relying only on the discrepancies between the applicants’ “lawful” income and expenses and on the fact that Mr Lyapchev was under further investigation. In the case of Chupetlovski the courts referred merely to the nature of the applicant’s unspecified “criminal activity”. While the Court stated in Todorov and Others (cited above, § 216) that in such type of cases it would generally defer to the national courts’ assessment as to the existence of a causal link between any criminal conduct of the applicants and the assets subject to forfeiture, in the particular case the reasons provided to substantiate such a link are clearly insufficient.
12. The Court thus sees no reason to reach a conclusion different than the one in the cases examined in Todorov and Others where it found a violation of Article 1 of Protocol No. 1 and criticised the approach taken by the national courts.
13. The complaints under examination are therefore admissible and disclose a breach of Article 1 of Protocol No. 1.
APPLICATION OF ARTICLE 41 OF THE CONVENTION14. Article 41 of the Convention provides:
“If the Court finds that there has been a violation of the Convention or the Protocols thereto, and if the internal law of the High Contracting Party concerned allows only partial reparation to be made, the Court shall, if necessary, afford just satisfaction to the injured party.”
15. In respect of pecuniary damage, the applicants claimed the value of their respective forfeited assets. They urged the Court to depart from the approach taken in Todorov and Others (cited above, §§ 320-22), where it rejected the applicants’ claims in respect of pecuniary damage and indicated that the national authorities had to reopen the domestic proceedings and re-examine the forfeiture claims. The applicants argued that such a procedural path would be ineffective. The applicants in the case of Lyapchevi pointed out that the re-examination of their case at the domestic level would be lengthy and costly, while the applicant in the case of Chupetlovski doubted that the Supreme Court of Cassation would order re-opening.
16. The Government urged the Court to reject the claims for pecuniary damage and follow the approach taken in Todorov and Others.
17. The Court is not in a position to speculate on whether the applicants’ forfeited assets were or were not the proceeds of crime, and cannot thus determine any pecuniary damage which the applicants might have suffered as a result of unjustified forfeiture. Accordingly, it dismisses the applicants’ claims in respect of pecuniary damage, and reiterates, as in Todorov and Others (cited above, §§ 320-22), that the most appropriate means to remedy the violation is the reopening of the domestic proceedings and the re-examination of the matter by the domestic courts, in compliance with the requirements of Article 1 of Protocol No. 1.
18. As to non-pecuniary damage, each of the applicants claimed 5,000 euros (EUR). The Court, taking note of the circumstances of the case, awards the amounts indicated in the appended table.
19. As to costs, the applicants in the case of Lyapchevi claimed EUR 3,022, and the applicant in the case of Chupetlovski claimed EUR 4,980, for the cost of their legal representation before the Court, as well for translation and postage. The Court, taking into account the circumstances of the case and in particular its repetitive character, finds it appropriate to award the sums indicated in the appended table. The applicant in the case of Chupetlovski requested that any sum awarded under the present head be paid directly to his legal representative before the Court.
20. Lastly, the applicant in the case of Chupetlovski claimed the equivalent of EUR 10,420, paid by him for legal representation and court fees in the domestic proceedings. The Court rejects this claim, noting that the applicant would be entitled to seek the reimbursement of any costs already paid in case he is successful at any fresh examination of his case (Articles 245 § 3 and 309 of the Code of Civil Procedure).
FOR THESE REASONS, THE COURT, UNANIMOUSLY,
Decides to join the applications;Declares the applications admissible;Holds that these applications disclose a breach of Article 1 of Protocol No. 1 concerning the forfeiture of alleged proceeds of crime; Holds(a) that the respondent State is to pay the applicants, within three months, the amounts indicated in the appended table, to be converted into the currency of the respondent State at the rate applicable at the date of settlement;
(b) that from the expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points;
Dismisses the remainder of the applicants’ claims for just satisfaction.Done in English, and notified in writing on 2 March 2023, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.
Viktoriya Maradudina Darian Pavli
Deputy Registrar President
APPENDIX
List of applications raising complaints under Article 1 of the Convention
(forfeiture of alleged proceeds of crime)
No.
Application no.
Date of introduction
Applicant’s
name
Year of birth
Representative’s name and location
Predicate offence
Period for which the applicant’s income and expenses were checked
Forfeited assets
Reasons given by the courts
Final decision in the forfeiture proceedings
Amount awarded for non-pecuniary damage
(in euros)[1]
Amount awarded for costs and expenses per application
(in euros)[2]
75478/13
28/11/2013
Household:
Spas Dimitrov LYAPCHEV
1972
Miroslava Dimitrova LYAPCHEVA
1982
Ekimdzhiev Mihail Tiholov
Plovdiv
Judgment of 4 June 2008 of the Sandanski District Court (final on 1 June 2009) – the first applicant was convicted for procuring. The offence had been committed between January and April 2005 in the applicants’ hotel (see the description of the forfeited assets).
29 March 1990 – 12 February 2007
A building bought in 2001, transformed into a hotel between 2002 and 2004; three plots of land bought by the applicants in 2001-03; two cars.
According to the Commission for Uncovering Proceeds of Crime, the value of the hotel was BGN 918,460 (EUR 470,000), and the remaining properties were worth BGN 41,225 (EUR 21,000).
Even if the assets to be forfeited had been acquired before the first applicant had committed the predicate offence, it was admissible to seek their forfeiture as proceeds of crime.
The discrepancy between the lawful income of the applicants and their expenditure during the period under examination was significant – equivalent to 3,278 minimum monthly salaries; other investigations had been opened against the first applicant in 1993, not yet concluded. The above was sufficient to allow a reasonable assumption that the assets which were subject to the proceedings were the proceeds of crime.
29 May 2013 – judgment of the Supreme Court of Cassation
3,000 jointly to the two applicants
2,000
30713/15
17/06/2015
Petyo Kirilov CHUPETLOVSKI
1973
Dobreva Natasha Ognyanova
Sofia
Final judgment of the Supreme Court of Cassation of 16 November 2009 – the applicant was convicted for taking bribe in the amount of BGN 120 (EUR 61) on one occasion in 2007 – as a lab technician he had taken the money to ensure a false sick leave certificate. It was noted when setting the sentence (suspended imprisonment) that the offence had been an “isolated accident” in the applicant’s life.
17 June 1991 –
1 March 2010
A flat in the sea resort of Slanchev Bryag, bought by the applicant in 2005, valued in 2010 at BGN 62,579 (EUR 32,000).
BGN 88,825 (EUR 45,430) in bank accounts of the applicant.
During the period under examination the applicant had received remuneration under a labour contract totalling 336 minimum monthly salaries, whereas his daily expenses, calculated on the basis of statistical data, amounted to the equivalent of 379 minimum monthly salaries.
He had acquired several immoveable properties, but for the majority he had proven a lawful source – money received from his family and from the sale of other property.
No such source had been established for the flat in Slanchev Bryag and the money deposited in bank accounts. The nature of the “criminal activity” of the applicant could lead to the conclusions that such activity had been the source of these assets.
22 December 2014 – decision of the Supreme Court of Cassation
3,000
2,000, to be paid directly to the applicant’s legal representative.
[1] Plus any tax that may be chargeable to the applicants.
[2] Plus any tax that may be chargeable to the applicants.