THIRD SECTION
CASE OF SABOUNI AND OTHERS v. BULGARIA
(Applications nos. 25795/15 and 59286/16)
JUDGMENT
STRASBOURG
2 March 2023
This judgment is final but it may be subject to editorial revision.
In the case of Sabouni 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 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 factual details of the applications are set out in the appended table.
4. The applicants complained of the forfeiture of their assets alleged to be the 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 Court recently adopted a leading judgment against Bulgaria on the forfeiture of 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”) – see Todorov and Others v. Bulgaria (nos. 50705/11 and 6 others, 13 July 2021). The Court identified some potential flaws in the 2005 Act and in the manner in which it had been applied, in particular 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, of the difficulties for defendants to prove what the courts considered “lawful” income during such a period, marked, moreover, by inflation and economic changes, and of the presumption that any asset not shown to have had a “lawful” provenance was the proceed of crime (see Todorov and Others, cited above, §§ 200-09). 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 provided in their decisions some particulars as to the criminal conduct in which the assets to be forfeited were alleged to have originated, and showed, in a reasoned manner, that those assets could have been the proceeds of such criminal conduct (ibid., §§ 210-15).
8. 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 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). On the other hand, the Court found no violation in the cases where such a causal link had been shown to exist, and where the domestic courts had established in a reasonable manner that the assets for which forfeiture was being sought were the proceeds of crime (see §§ 251-81).
9. In the present case, the Government argued that, as in the cases examined in Todorov and Others where no violation of the applicants’ rights had been found, the domestic courts had performed the necessary analysis and had “clearly established” a causal link between “criminal activity” of the applicants (Mr Sabouni in application no. 25795/15 and Mr Krastev in application no. 59286/16) and the assets to be forfeited.
10. The Court, however, is not satisfied that this was the case. In both applications under examination the defendants’ established “criminal conduct” amounted to one-off offences, which do not appear to have yielded any financial gain. Moreover, in the case of Mr Sabouni and other applicants (application no. 25795/15) the offence had been committed in 2009, while the authorities examined the applicants’ financial situation as of 1993 – a period set with regard to a previous prosecution, and in the case of the applicants Krastevi (application no. 59286/16) it was expressly stated by the criminal courts that Mr Krastev had had no other “anti-social behaviour”. In this situation the Court does not consider that the authorities provided any relevant particulars as to criminal conduct which could have generated the alleged proceeds of crime, as was required in Todorov and Others (cited above). Nor did they show in a reasoned and adequate manner that the particular assets under examination could have been the proceeds of crime: they merely referred in that regard to the potential of offences of the type committed by Mr Sabouni and Mr Krastev to yield financial gain, and to the discrepancies established between the applicants’ expenses and what was considered “lawful” income. 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.
11. The complaints under examination are therefore admissible and disclose a breach of Article 1 of Protocol No. 1.
APPLICATION OF ARTICLE 41 OF THE CONVENTION12. 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.”
13. In respect of pecuniary damage, the applicants claimed the value of their 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 to re-examine the forfeiture claims. The applicants argued that such a procedural path would be ineffective because the re-examination of their cases at the domestic level would be lengthy and costly.
14. The Government urged the Court to reject the claims for pecuniary damage.
15. The Court will not 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.
16. As to non-pecuniary damage, the applicants claimed compensation ranging between 5,000 and 22,000 euros (EUR). The Court, taking note of the circumstances of the case, awards the amounts indicated in the appended table.
17. As to costs, the applicants in the application Sabouni and Others claimed EUR 3,612, and the applicants in the application of Krastevi claimed EUR 7,442, for the cost of their legal representation before the Court, as well as 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.
18. Lastly, the applicants in the case of Krastevi also claimed the equivalent of EUR 134,740 – court fees and adverse costs ordered against them in the domestic proceedings. The applicants stated expressly that they had not paid these costs, and the Court thus rejects this claim for the same reasons as in Todorov and Others (cited above, § 332). It observes in addition that the applicants would be entitled to claim the reimbursement of any costs already paid if they are successful at any fresh examination of their 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/
registration
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]
25795/15
07/05/2015
(3 applicants)
Taleb Ahmed SABOUNI
1968
Sara Taleb SABOUNI
1994
ARAS EOOD
1900
Ekimdzhiev Mihail Tiholov
Plovdiv
The first applicant was initially prosecuted for tax evasion committed in 2005 but was acquitted in 2010. In the meantime, through a plea agreement approved by the Pazardzhik District Court on 23 July 2009, he was convicted for extortion committed in February 2009: he had menaced another person, exacting from him the payment of BGN 10,000 (EUR 5,115).
1 September 1993 – 9 November 2010; the period was set with regard to the first applicant’s prosecution for tax evasion and was not amended after the extortion conviction was considered as grounds to seek forfeiture.
From the first applicant and his daughter (the second applicant) – several shops, plots of land and a flat in Pazardzhik, shares in a company and sums received from the sale of other immoveable properties and shares in companies;
From the third applicant (a company created by the first applicant but sold to a third party in November 2006) – a plot of land in the sea resort of Slanchev Bryag, bought in 2005, and a hotel partially built on it.
According to the Commission for Uncovering Proceeds of Crime, the global value of the above assets was equivalent to about EUR 835,000.
The first applicant claimed to have received income from loans and bank credits, the sale of shares in companies and immoveable properties and gifts from his family; as concerns the latter, he had indeed received about USD 180,000, but the lawful provenance of this money had not been established.
The first applicant’s income and expenditure could be calculated in different manners, but in any event the difference between the two was substantial - at least what was the equivalent of 5,600 minimum monthly salaries.
As to the third applicant, it had not proven the lawful provenance of the money to acquire the property in Slanchev Bryag. The hotel had been constructed while the company had still been owned by the first applicant. The persons having acquired in in 2006 could not be considered to have acted in good faith.
The first applicant’s “criminal activity” could generate financial resource equalling the applicants’ expenditure. Seeing the lack of lawful income, the applicants had not rebutted the presumption under section 4(1) of the 2005 Act.
18 November 2014 – final decision of the Supreme Court of Cassation
3,000 to each of the first and second applicants
2,000
59286/16
04/10/2016
Plamen Ognyanov KRASTEV
1961
Zhanet Yordanova KRASTEVA
1960
Stefanova Snezhana Hristova
Plovdiv
Judgment of the Petrich District Court of 20 January 2001 – the first applicant was convicted for smuggling goods valued at the equivalent of about EUR 9,300, committed on one occasion in 1993; he was sentenced to three months’ imprisonment, suspended, and a fine; the rather lenient sentence was justified, among others, by the fact that this was the sole instance of “anti-social behaviour” in the first applicant’s life.
1 January 1984 – 29 April 2008
Numerous flats, shops and other immoveable properties in Pernik; several vehicles; the first applicant’s shares in a company.
According to the Commission for Uncovering Proceeds of Crime, the global value of these assets was BGN 3,237,010 (EUR 1,656,000).
While the applicants had proven having received salaries, rent, profit from economic activities and monetary gifts from their parents, they had not established sufficient lawful income.
The second applicant (married to the first applicant at the time) had not proven a personal contribution for the acquisition of the immoveable properties.
The nature of the first applicant’s “criminal activity” (smuggling being capable, in principle, of leading to financial gain), coupled with the considerable discrepancy between the applicants’ income and expenditure, proved the criminal provenance of the assets to be forfeited.
6 April 2016 – decision of the Supreme Court of Cassation
3,000
per applicant
2,000
[1] Plus any tax that may be chargeable to the applicants.
[2] Plus any tax that may be chargeable to the applicants.