CASE OF VARVARA v. ITALY [Extracts]

SECOND SECTION

CASE OF VARVARA v. ITALY

(Application no. 17475/09)

JUDGMENT

(Merits)

[Extracts]

STRASBOURG

29 October 2013

FINAL

24/03/2014

This judgment has become final under Article 44 § 2 of the Convention. It may be subject to editorial revision.

In the case of Varvara v. Italy,

The European Court of Human Rights (Second Section), sitting as a Chamber composed of:

Danutė Jočienė, President,
Guido Raimondi,
Dragoljub Popović,
András Sajó,
Işıl Karakaş,
Paulo Pinto de Albuquerque,
Helen Keller, judges,
and Stanley Naismith, Section Registrar,

Having deliberated in private on 1 October 2013,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

1. The case originated in an application (no. 17475/09) against the Italian Republic lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by an Italian national, Mr Vincenzo Varvara (“the applicant”), on 23 March 2009.

2. The applicant was represented by Mr A. Gaito, a lawyer practising in Rome. The Italian Government (“the Government”) were represented by their Agent, Mrs E. Spatafora and their co-agent, Ms P. Accardo.

3. The applicant alleged that the confiscation was incompatible with Articles 7 and 6 § 2 of the Convention, and with Article 1 of Protocol No. 1.

4. On 21 May 2012 the application was communicated to the Government. It was also decided, in accordance with Article 29 § 1 of the Convention, that the Chamber would decide simultaneously on the admissibility and the merits of the case.

THE FACTS

I. THE CIRCUMSTANCES OF THE CASE

5. The applicant was born in 1943 and lives in Gravina di Puglia.

A. The development plan

6. The applicant submitted a development plan (piano di lottizzazione) to the municipality of Cassano delle Murge with a view to building housing near the Mercadante forest, On 31 October 1984 the municipality approved the plan. On 1 March 1985 the applicant concluded a development agreement (convenzione di lottizzazione) with the municipality and obtained the building permits for an initial group of buildings.

7. On 6 February 1986 a ministerial decree of 1 August 1985 was published in the Official Gazette. This decree stated that the land around the Mercadante forest was to be given protected landscape status and as such be subject to the provisions of Law no. 1497/1939, which imposed compulsory prior ministerial authorisation for the issue of building permits.

8. The municipality of Cassano delle Murge challenged the Ministerial Decree before the Puglia Administrative Court and, under a decision of 10 March 1993, was partially successful. Pursuant to that decision (which is not included in the case file) the land covered by the applicant’s plan was no longer subject to landscape constraints.

9. Furthermore, two laws had come into force in the meantime. The first (Law no. 431/1985) had granted the regions exclusive legislative powers in the landscape protection field. The second (Regional Law no. 30/1990) made the land adjacent to the forests subject to landscape constraints necessitating authorisation from the Region, except where the development plan had been approved prior to 6 June 1990. Under the combined effect of these laws, plans to be approved after this date had to receive a favourable opinion from the relevant regional committee.

10. In 1993 the applicant submitted to the municipality of Cassano delle Murge a variant of the plan already approved in 1984. The case file shows that the new variant had been necessary because the original plan had accidentally included an area comprising an aqueduct. It had therefore been necessary to reduce the size of the project by 3,917 square metres. Moreover, the owners of the neighbouring plots had decided not to continue with the project, and so it had had to be modified, particularly where the layout of the buildings was concerned. That variant was approved by the municipality of Cassano delle Murge on 30 May 1994.

11. On 19 August 1994 the applicant concluded a development agreement with the municipality. The latter issued him with the building permits.

12. On 21 May 2007 the municipality issued a certificate to the effect that all the buildings constructed by the applicant prior to 30 September 2004 had been in conformity with landscape legislation.

B. Criminal proceedings

13. Criminal proceedings were brought against the applicant for unlawful land development. On 6 February 1997 and interim attachment order was issued in respect of the land and buildings (seventeen blocks containing four apartments each).

14. In a judgment of 1 June 1998, the Acquaviva delle Fonti District Court noted that the applicant had built seventeen apartment blocks in accordance with the variant approved in 1994 and the building permits issued by the municipality. However, the court considered that this variant was not merely a modification of the 1984 project but rather a new development plan which had to comply with the provisions which had since come into force. Given that the provisions in question required a favourable opinion from the regional committee responsible for town planning and that the applicant had failed to apply for such an opinion, the building permits issued by the municipality had to be considered inoperative.

The situation complained of was therefore that of an unlawful development project which had damaged a protected natural site (section 20 a) and c) of Law no. 47/1985 and Article 734 of the Criminal Code). Having taken account of the mitigating circumstances, the court imposed a nine-month suspended prison sentence and a fine on the applicant. It ordered the confiscation, in favour of the municipality, of the land and buildings covered by the impugned development plan.

15. The applicant appealed.

16. In a judgment of 22 January 2001, the Bari Court of Appeal allowed the applicant’s appeal and acquitted him on the merits (perché il fatto non sussiste). The court considered that there was only one development plan, which had been authorised in 1984, that is to say long before the entry into force of the 1985 ministerial decree and Law no. 431/1985. It held that in 1994 the applicant had submitted a simple amendment to the already approved plan. The applicant’s land had therefore not been covered by a landscape protection measure and there had been no unlawful land development.

17. The public prosecutor and the State Counsel appealed on points of law.

18. In a judgment given on 17 May 2002, the Court of Cassation set aside the impugned decision and remitted the case for reconsideration.

19. In a judgment of 5 May 2003, the Bari Court of Appeal convicted the applicant of unlawful land development on the grounds that the variant of the development plan constituted a new, separate plan.

20. The applicant appealed on points of law.

21. In a judgment of 10 December 2004, the Court of Cassation allowed the applicant’s appeal, set aside the impugned decision and remitted the case for reconsideration.

22. In a judgment of 23 March 2006, the Bari Court of Appeal discontinued the proceedings on the ground that the offences had been time‑barred since the end of 2002. The court observed that pursuant to the case-law of the Court of Cassation, it was mandatory to order the confiscation in question whether the defendant was acquitted on the merits (on grounds of il fatto non sussiste) or the case was time-barred, where the development plan was objectively incompatible with spatial planning provisions. The court considered the variant as a new land development plan, which meant that regional authorisation would have had to be obtained before the building permits could be issued. Furthermore, the Court of Appeal ordered the confiscation of the land and the buildings thereon within the meaning of section 1 of Law no. 47/1985.

23. The applicant appealed on points of law.

24. In a judgment of 11 June 2008, deposited with the registry on 1 October 2008, the Court of Cassation dismissed the applicant’s appeal.

...

THE LAW

I. ALLEGED VIOLATION OF ARTICLE 7 OF THE CONVENTION

44. The applicant complained of the illegality of the confiscation of his property on the ground that this penalty had been imposed without any prior conviction. He alleged a violation of Article 7 of the Convention, which provides:

“1. 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.

2. This article shall not prejudice the trial and punishment of any person for any act or omission which, at the time when it was committed, was criminal according to the general principles of law recognised by civilised nations.”

...

B. Merits

1. The applicant’s submissions

46. The applicant complained that a criminal penalty had been imposed on him even though he had not been convicted of any offence. He observed that under Italian law, criminal prosecutions could not be brought if the criminal offence in question was time-barred. In the present case, according to the applicant, the offence had been time-barred as far back as August 2001. However, the criminal proceedings had continued until 2008 for the sole purpose of imposing a penalty.

The applicant further pointed to the inequality between the following two situations. In the normal course of events courts had to acquit defendants in cases of insufficient or contradictory evidence (Article 530 of the Code of Criminal Procedure [CCP]) or where the defendant could not be held responsible beyond any reasonable doubt (Article 533 CCP). Nevertheless, if the offence was time-barred, courts could only acquit defendants on the merits if they had clearly not committed the offence in question, the facts had never occurred, or the facts did not constitute an offence or did not come under criminal law (Article 129 § 2 CCP). The burden of proof had therefore been reversed inasmuch as the applicant had had to attempt to prove that he was clearly innocent, which situation was incompatible with the safeguards of a fair trial and with the Convention.

47. Moreover, the applicant reiterated that the land development plan had been authorised by the municipality of Cassano delle Murge, that he had built the housing in accordance with the building permits issued to him, and that he had been assured that his plan was in conformity with the applicable provisions. In his view, the conduct of the authorities in first of all authorising and even encouraging the building project and then radically changing their attitude after allowing the work to be completed was highly questionable. Lastly, the applicant pointed out that the fact that his neighbours had decided not to continue with the development plan was immaterial to whether or not the plan itself complied with national law.

2. The Government’s submissions

48. The Government first of all observed that following the finding of a violation in the judgment Sud Fondi (Sud Fondi srl and Others v. Italy, no. 75909/01, 20 January 2009), the Constitutional Court (judgment no. 239 of 24 July 2009) had ruled that national law should be interpreted in accordance with the Convention, and that according to the principles set out in the judgment Sud Fondi, “confiscation cannot be automatically implemented following unlawful land development, without having regard to of liability for the facts”.

Furthermore, Law no. 102 of 3 August 2009 had introduced a procedure for lifting confiscation measures and set out the conditions for compensating persons having suffered a confiscation incompatible with the Convention.

49. The Government then observed that under Italian law the courts still considered the impugned confiscation to be an administrative sanction. For this reason, the imposition of this sanction in the present case was compatible with Article 7 of the Convention.

Unlike Sud Fondi, in the instant case the applicant had not been acquitted on the merits but had had the benefit of a decision not to prosecute because the offence had become time-barred. The Government submitted that the applicant could have waived the implementation of the time limitation and requested the court to decide the case under the terms of Article 129 § 2 of the Code of Criminal Procedure. At all events, with reference to the case‑law of the Court of Cassation (judgment no. 5857 of 16 February 2011), the Government pointed out that the instant case had not been time‑barred before the commencement of the criminal proceedings, which pointed to the legality of the sanction imposed.

The construction work carried out had objectively breached the relevant legal provisions, and therefore the offence of unlawful land development had been made out, because the development plan had been unlawful. According to the Government, the applicant had known of the existence of the landscape constraints. The applicant’s neighbours had allegedly dropped out of the project in order to avoid involvement in real-estate speculation. Article 7 of the Convention had not been violated because the applicable provisions had been accessible and foreseeable. In proceeding as he had done the applicant had known that he was running the risk of having his property confiscated. This penalty had therefore been a foreseeable consequence.

50. The Government requested that should the Court conclude that there had been a violation of the Convention, regard should be had to these submissions for the purposes of just satisfaction.

3. The Court’s assessment

a) Applicability of Article 7 of the Convention

51. The Court reiterates that in the case of Sud Fondi (Sud Fondi srl and others v. Italy, decision cited above) it held that the impugned confiscation should be interpreted as a penalty. Article 7 of the Convention is therefore applicable.

b) Applicable principles

52. The guarantee enshrined in Article 7, which is an essential element of the rule of law, occupies a prominent place in the Convention protection system, as is underlined by the fact that Article 15 authorises no derogation from it in time of war or other public emergency. It should be construed and applied, as follows from its object and purpose, in such a way as to provide effective safeguards against arbitrary prosecution, conviction and punishment (see S.W. v. the United Kingdom, 22 November 1995, § 34, Series A no. 335-B, and C.R. v. the United Kingdom of 22 November 1995, Series A nos. 335-B and 335-C, § 32).

53. Article 7 § 1 embodies the principle that only the law can define a crime and prescribe a penalty (nullum crimen, nulla poena sine lege). While it prohibits, in particular, extending the scope of existing offences to acts which previously were not criminal offences, it also lays down the principle that the criminal law must not be extensively construed to an accused’s detriment, for instance by analogy (see, among other authorities, Coëme and Others v. Belgium, nos. 32492/96, 32547/96, 32548/96, 33209/96 and 33210/96, § 145, ECHR 2000-VII).

54. It follows that the law must clearly define offences and the relevant penalties (see Achour v. France [GC], no. 67335/01, § 41, ECHR 2006‑IV). This requirement is satisfied where the individual can know from the wording of the relevant provision and, if need be, with the assistance of the courts’ interpretation of it, what acts and omissions will make him criminally liable.

55. When speaking of “law” (“droit”) Article 7 alludes to the very same concept as that to which the Convention refers elsewhere when using that term, a concept which comprises statute law as well as case-law and implies qualitative requirements, including those of accessibility and foreseeability (see, in particular, Cantoni v. France, 15 November 1996, § 29, Reports of Judgments and Decisions 1996-V; S.W., cited above, § 35; and Kokkinakis v. Greece, 25 May 1993, §§ 40-42, Series A no. 260‑A). In any system of law, including criminal law, however clearly drafted a legal provision may be, there is an inevitable element of judicial interpretation. There will always be a need for clarification of dubious points and for adaptation to changing circumstances. Indeed, in the Convention States, the progressive development of the criminal law through judicial law-making is a well‑entrenched and necessary part of legal tradition. Article 7 of the Convention cannot be read as outlawing the gradual clarification of the rules of criminal liability through judicial interpretation from case to case, provided that the resultant development is consistent with the essence of the offence and could reasonably be foreseen (see Streletz, Kessler and Krenz v. Germany [GC], nos. 34044/96, 35532/97 and 44801/98, § 50, ECHR 2001‑II).

56. Foreseeability depends to a considerable degree on the content of the law concerned, the field it is designed to cover and the number and status of those to whom it is addressed. A law may still satisfy the requirement of “foreseeability” where the person concerned has to take appropriate legal advice to assess, to a degree that is reasonable in the circumstances, the consequences which a given action may entail. This is particularly true in relation to persons carrying on a professional activity, who are used to having to proceed with a high degree of caution when pursuing their occupation. They can on this account be expected to take special care in assessing the risks that such activity entails (see Pessino v. France, no. 40403/02, § 33, 10 October 2006).

57. The Court must therefore verify that at the time when an accused person performed the act which led to his being prosecuted and convicted there was in force a legal provision which made that act punishable, and that the punishment imposed did not exceed the limits fixed by that provision (see Murphy v. the United Kingdom, no. 4681/70, Commission decision, 3 and 4 October 1972, Reports of Decisions 43; and Coëme and Others, cited above, § 145).

c) Application of these principles to the present case

58. The Court reiterates that in the Sud Fondi case (see Sud Fondi srl and Others v. Italy, cited above, §§ 112 and 114) it found that the enforcement of the confiscation despite the decision to acquit the applicant companies had been unfounded and arbitrary and breached Article 7 of the Convention. The acquittal had been ordered on the ground that the applicant companies had committed an unavoidable and excusable error in interpreting the law.

59. In the present case, the applicant had benefited from a decision not to prosecute on the ground that the offence of unlawful land development was statute-barred, and a criminal penalty had been imposed on him, namely confiscation of the buildings and plots of land covered by the impugned development plan. The Court must consider whether the imposition of such a penalty is compatible with Article 7 of the Convention.

60. Firstly, the Court notes that under the terms of the applicable provision ..., confiscation of the unlawful buildings and the unlawfully developed land is authorised where the criminal courts have issued a “final decision” establishing the unlawful nature of the development in question. This provision does not specify that the “final decision” must be a conviction.

The national courts interpreted this provision as meaning that it was possible to impose the penalty without a conviction where they regarded it as an administrative sanction. The Court notes in this connection that there is a domestic-law principle to the effect that defendants cannot be punished without a conviction. In particular, no penalty can be imposed where the offence is statute-barred. Furthermore, the interpretation of the applicable provision by the national courts was prejudicial to the defendant.

61. Secondly, the Court fails to see how punishing a defendant whose trial has not resulted in a conviction could be compatible with Article 7 of the Convention, which provision clearly sets out the principle of legality in criminal law.

62. Given that no one can be found guilty of an offence which is not provided for by law and that no one can incur a penalty which is not provided for by law, the first consequence is clearly to prohibit the national courts from interpreting the law in an extensive manner detrimental to the defendant, otherwise he or she could be punished for conduct which is not defined in law as an offence.

63. Another consequence of cardinal importance flows from the principle of legality in criminal law, namely a prohibition on punishing a person where the offence has been committed by another.

64. The Court has previously examined this issue from the angle of Article 6 § 2 of the Convention.

65. In the case of A.P., M.P. and T.P. v. Switzerland, 29 August 1997, Reports of Judgments and Decisions 1997‑V, a number of heirs had been punished for a criminal offence committed by the deceased. The Court considered that the criminal sanction imposed on the heirs for tax fraud attributed to the deceased was incompatible with the fundamental rule of criminal law that criminal liability does not survive the person who has committed the criminal act (ibid., § 48). Swiss law explicitly acknowledged this principle, and the Court affirmed that this rule was also required by the presumption of innocence enshrined in Article 6 § 2 of the Convention. Inheritance of the guilt of the dead is not compatible with the standards of criminal justice in a society governed by the rule of law. That principle was reaffirmed in the case of Lagardère (Lagardère v. France, no. 18851/07, 12 April 2012, § 77), in which the Court reiterated that the rule that criminal liability does not survive the person who has committed the criminal act is not only required by the presumption of innocence enshrined in Article 6 § 2 of the Convention, but also by the principle that inheritance of the guilt of the dead is incompatible with the standards of criminal justice in a society governed by the rule of law

66. Given the connection between Articles 6 § 2 and 7 § 1 of the Convention (see Guzzardi v. Italy, 6 November 1980, § 100, Series A no. 39), the Court considers that the rule reiterated by it in the preceding paragraph is also valid from the angle of Article 7 of the Convention, which requires that no one can be held guilty of a criminal offence committed by another. While it is true that anyone must be able at any time to ascertain what is permitted and what is prohibited via clear and detailed laws, a system which punished persons for an offence committed by another would be inconceivable.

67. Nor can one conceive of a system whereby a penalty may be imposed on a person who has been proved innocent or, in any case, in respect of whom no criminal liability has been established by a finding of guilt. This is the third consequence of the principle of legality in criminal law: the prohibition on imposing a penalty without a finding of liability, which also flows from Article 7 of the Convention.

68. This principle was also affirmed by the Court in respect of Article 6 § 2 of the Convention. In the case of Geerings (see Geerings v. the Netherlands, no. 30810/03, § 47, 1 March 2007), the domestic courts had confiscated the applicant’s property because they had considered that he had benefited from the criminal offence in question, even though he had never been found in possession of property whose origin he had been unable to explain. The Court considered that the confiscation of the “illegally obtained advantage” had been an inappropriate measure, especially since the applicant had not been found guilty of the crime in question and it had never been proved that he had obtained an advantage from it. The Court held that this situation was necessarily incompatible with the presumption of innocence, and concluded that there had been à violation of Article 6 § 2 of the Convention.

69. A comparison between Article 5 § 1 a) and Articles 6 § 2 and 7 § 1 shows that for the purposes of the Convention there can be no “conviction” unless it has been established in accordance with the law that there has been an offence – a criminal or, if appropriate, a disciplinary offence (see Engel and Others v. Netherlands, 8 June 1976, § 68, Series A no. 22, and Guzzardi v. Italy, 6 November 1980, § 100, Series A no. 39). Similarly, there can be no penalty unless personal liability has been established.

70. Of course the Contracting States remain free, in principle, to apply the criminal law to an act where it is not carried out in the normal exercise of one of the rights protected by the Convention and therefore to define the constituent elements of such offence. In particular, and again in principle, the Contracting States may, under certain conditions, penalise a simple or objective fact as such, irrespective of whether it results from criminal intent or negligence. Examples of such offences may be found in the laws of the Contracting States (see Salabiaku v. France, 7 October 1988, Series A no. 141, § 27). The same principle was affirmed in Janosevic v. Sweden (no. 34619/97, 23 July 2002, § 68), where the Court added that “the lack of subjective elements does not necessarily deprive an offence of its criminal character; indeed, criminal offences based solely on objective elements may be found in the laws of the Contracting States”. Article 7 of the Convention does not explicitly demand any “psychological”, “intellectual” or “moral” link between the substantive element of the offence and the person deemed to have committed it. The Court in fact recently found that there had been no violation of Article 7 in a case where a fine had been imposed on an applicant party which had committed a proven offence without intention or negligence on its part (see Valico S.r.l. v. Italy (dec.), no. 70074/01, ECHR 2006‑III). The finding of liability was sufficient to justify implementing the sanction.

71. The “penalty” and “punishment” rationale and the “guilty” concept (in the English version) and the corresponding notion of “personne coupable” (in the French version) support an interpretation of Article 7 as requiring, in order to implement punishment, a finding of liability by the national courts enabling the offence to be attributed to and the penalty to be imposed on its perpetrator. Otherwise the punishment would be devoid of purpose (see Sud Fondi and Others, cited above, § 116). It would be inconsistent on the one hand to require an accessible and foreseeable legal basis and on the other to permit punishment where, as in the present case, the person in question has not been convicted.

72. In the present case, the criminal penalty which was imposed on the applicant despite the fact that the criminal offence had been time-barred and his criminal liability had not been established in a verdict as to his guilt, is incompatible with the principle that only the law can define a crime and prescribe a penalty, which the Court has recently clarified and which is an integral part of the legality principle laid down in Article 7 of the Convention. Consequently, the penalty in issue is not prescribed by law for the purposes of Article 7 of the Convention and is arbitrary.

73. Therefore, there has been a violation of Article 7 of the Convention.

...

III. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1

78. The applicant complained of the unlawfulness and the disproportionate nature of the confiscation of his property. He alleged a violation of Article 1 of Protocol No. 1, the relevant part of which provides 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 used of property in accordance with the general interest ...”.

79. The Government contested that argument.

...

B. Merits

1. The parties’ submissions

81. The applicant mainly reiterated the arguments advanced under Article 7, asking the Court to find a violation of this provision. He further observed that the impugned penalty was disproportionate given that 90% of the land confiscated was undeveloped.

82. The Government contested that argument. In their view the lawfulness and proportionality criteria had been satisfied since the deterrent aim of the confiscation ensured its proportionality even if it covered the whole surrounding land and not just the buildings erected. The Government invited the Court to have regard to these arguments for the purposes of just satisfaction should it find a violation of the Convention.

2. The Court’s assessment

a) Applicability of Article 1 of Protocol No. 1

83. As the Court held in Sud Fondi (cited above, §§ 125 and 129), the confiscation of the disputed land and buildings owned by the applicant companies constituted an interference with the enjoyment of their right to respect for their possessions. It must be concluded that Article 1 of Protocol No. 1 is applicable. It remains to be seen whether this situation is covered by the first or the second rule set out in that provision. Article 1 of Protocol No. 1 comprises three distinct rules: the first rule, set out in the first sentence of the first paragraph, is of a general nature and enunciates the principle of the peaceful enjoyment of property; the second rule, contained in the second sentence of the first paragraph, covers deprivation of possessions and subjects it to certain conditions; and the third rule, stated in the second paragraph, recognises that the Contracting States are entitled, inter alia, to control the use of property in accordance with the general interest. The three rules are not, however, “distinct” in the sense of being unconnected. The second and third rules are concerned with particular instances of interference with the right to peaceful enjoyment of property and should therefore be construed in the light of the general principle enunciated in the first rule (see, inter alia, James and Others v. the United Kingdom, 21 February 1986, § 37, Series A no. 98, and Iatridis v. Greece [GC], no. 31107/96, § 55, ECHR 1999-II).

In Sud Fondi (cited above, §§ 128-129), the Court held as follows:

“128. The Court notes that the present case differs from that of Agosi v. the United Kingdom (judgment of 24 October 1986, Series A no.108), in which the confiscation was ordered in respect of property which had been the object of the offence (objectum sceleris) following the defendants’ conviction, because in the instant case the confiscation was ordered following an acquittal. For the same reason, the present case also differs from C.M. v. France ([dec.], no. 28078/95, ECHR 2001‑VII) and Air Canada v. the United Kingdom (judgment of 5 May 1995, Series A no. 316‑A), in which the confiscation was ordered after the defendants’ conviction in respect of property which was the instrumentum sceleris and was in the possession of third persons. In connection with the proceeds of a criminal activity (productum sceleris), the Court observes that it has considered a case in which the confiscation followed the applicant’s conviction (see Phillips v. the United Kingdom, no. 41087/98, §§ 9-18, ECHR 2001-VII) and cases in which confiscation had been ordered independently of the existence of any criminal proceedings because the applicant’s property had been assumed to be of unlawful origin (see Riela and Others v. Italy (dec.), no. 52439/99, 4 September 2001; Arcuri and Others v. Italy (dec.), no. 52024/99, 5 July 2001; and Raimondo v. Italy, 22 February 1994, Series A no. 281-A, § 29) or to be used for unlawful activities (see Butler v. the United Kingdom (dec.) no. 41661/98, 27 June 2002). In the first case cited above, the Court held that the confiscation constituted a penalty within the meaning of the second paragraph of Article 1 of Protocol No. 1 (see Phillips, cited above, § 51, and, mutatis mutandis, Welch v. the United Kingdom, 9 February 1995, Series A no. 307-A, § 35), whereas in the other cases it considered that the aim had been to control the use of property.

129. In the instant case the Court considers it unnecessary to determine whether the confiscation falls into the first or the second category because the second paragraph of Article 1 of Protocol no. 1 applies in all cases (see Frizen v. Russia, no. 58254/00, § 31, 24 March 2005).”

As in Sud Fondi (cited above, § 129), the Court considers it unnecessary to determine whether the confiscation falls into the first or the second category because, in both cases, it is the second paragraph of Article 1 of Protocol no. 1 which applies.

b) Compliance with Article 1 of Protocol No. 1

84. The Court reiterates that Article 1 of Protocol No. 1 above all requires that any interference by a public authority with the enjoyment of property be in accordance with the law: the second sentence of the first paragraph of this article only authorises deprivation of property “subject to the conditions provided for by law”; the second paragraph entitles the States to control the use of property by enforcing “laws”. Moreover, the rule of law, which is one of the fundamental principles of a democratic society, is inherent in all the Articles of the Convention (see Iatridis v. Greece [GC], no. 31107/96, § 58, ECH 1999‑II, and Amuur v. France, 25 June 1996, § 50, Reports 1996‑III). It follows that the need to ascertain whether a fair balance has been struck between the demands of the general interest of the community and the requirements of the protection of the individual’s fundamental rights (see Sporrong and Lönnroth v. Sweden, 23 September 1982, § 69, Series A no. 52, and Former King of Greece and Others v. Greece [GC], no. 25701/94, § 89, ECHR 2000‑XII) becomes relevant only once it has been established that the impugned interference satisfied the requirement of lawfulness and was not arbitrary.

85. The Court has already noted that the offence in respect of which the confiscation was imposed on the applicant was not provided for by law within the meaning of Article 7 of the Convention and was arbitrary (see paragraphs 72-73 above). Accordingly, the Court finds that the interference with the applicant’s right to the peaceful enjoyment of his property was contrary to the requirement of lawfulness and was arbitrary, and that there was a violation of Article 1 of Protocol No. 1. This finding dispenses the Court establishing whether or not a fair balance was struck.

IV. APPLICATION OF ARTICLE 41 OF THE CONVENTION

86. 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.”

A. Damage

87. The applicant requested the restitution of the confiscated property plus a sum of 500,000 euros (EUR) in compensation for the deterioration of the buildings. He also requested the payment of EUR 250,000 in respect of non-pecuniary damage.

88. The Government objected to an award of any amount because they considered that the application raised no issues under the Convention. Should the Court find a violation, they requested that the fact that the applicant had not been acquitted on the merits be taken into account for the purposes of just satisfaction.

89. The Court considers that under the circumstances of the case, the question of the application of Article 41 is not ready for decision in respect of pecuniary damage, given the complexity of the case and the possibility of the parties securing some form of compensation at the domestic level. This question should therefore be reserved and the subsequent procedure determined in the light of a possible agreement between the respondent State and the applicant (Rule 75 § 1 of the Rules of Court).

90. Where non-pecuniary damage is concerned, the Court, ruling on an equitable basis, awards the applicant EUR 10,000.

B. Costs and expenses

91. The applicant did not claim reimbursement of the costs and expenses incurred hitherto in the proceedings. Under these circumstances the Court considers that the applicant should receive no award under this head.

C. Default interest

92. The Court considers it appropriate that the default interest rate should be based on the marginal lending rate of the European Central Bank, to which should be added three percentage points.

FOR THESE REASONS, THE COURT

...

2. Holds, by six votes to one, that there has been a violation of Article 7 of the Convention;

...

4. Holds, unanimously, that there has been a violation of Article 1 of Protocol No. 1 to the Convention;

5. Holds, unanimously,

(a) that the respondent State is to pay the applicant, within three months from the date on which the judgment becomes final in accordance with Article 44 § 2 of the Convention, the sum of EUR 10,000 (ten thousand euros) plus any tax that may be chargeable to the applicant, in respect of non-pecuniary damage;

(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;

6. Holds, unanimously, that the question of Article 41 of the Convention is not ready for decision in respect of pecuniary damage; consequently, it

a) reserves this question;

b) invites the Government and the applicant to inform it, within six months, of any agreement which they may reach

c) reserves the procedure and delegates to the President the power to fix the same if need be;

7. Dismisses, unanimously, the remainder of the applicant’s claim for just satisfaction.

Done in French, and notified in writing on 29 October 2013, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

              Stanley NaismithDanutė Jočienė
RegistrarPresident

In accordance with Article 45 § 2 of the Convention and Rule 74 § 2 of the Rules of Court, the separate opinion of Judge Pinto de Albuquerque is annexed to this judgment.

D.J.
S.H.N.

PARTLY CONCURRING AND PARTLY DISSENTING OPINION OF JUDGE PINTO DE ALBUQUERQUE

In the Varvara case the Court has once again to deal with a confiscation without any prior conviction in criminal proceedings. While the confiscation in Sud Fondi srl and Others had been ordered in respect of applicant companies which were third parties vis-à-vis the defendants in criminal proceedings which had resulted in the acquittal of the latter on the ground that they could not be accused of any negligence or intention to commit a criminal offence and that they had committed an “unavoidable and excusable error” in interpreting “obscure and poorly worded” regional provisions[1], the applicant in the present case had himself been accused in criminal proceedings which had led to a decision not to prosecute on the grounds that the offence was statute-barred. In the light of the uncertainties in the Court’s case-law regarding the point of principle of the compatibility with the European Convention on Human Rights (“the Convention”) of systems of confiscation without criminal conviction and “extended confiscation”, the present case should have been an opportunity for the Court to clarify the conditions and modalities of this fundamental instrument of contemporary criminal-law policy, by taking account of developments in international human rights law, international criminal law, comparative criminal law and European Union law. The Chamber decided not to take this opportunity. That is precisely what I intend to do in this opinion, pending urgent clarification by the Grand Chamber. I shall try to highlight the reasons for my opposition to the finding of a violation of Article 7 of the Convention, even though I agree with the finding of a violation of Article 1 of Protocol No. 1 and the decision not to rule in respect of Article 6 § 2.

The international obligation to confiscate the instruments and proceeds of crime

International law has long recognised the cardinal importance of confiscation as a means of combating the most serious forms of crime, such as drug trafficking, terrorism, organised transnational crime and corruption.

Article 37 of the 1961 Single Convention on Narcotic Drugs as amended by the 1972 Protocol thereto, provides for the confiscation of any drugs, substances (objectum sceleris) and equipment used in or intended for the commission of any of the offences referred to in Article 36 (instrumentum sceleris). Article 22 (3) of the Convention on Psychotropic Substances of 1971 also incorporates this provision. Article 5 of the 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances extends confiscation beyond narcotics, psychotropic substances and equipment or other instruments used in or intended in any way for the commission of the offences referred to in Article 3 (1) of the Convention, to include proceeds derived from offences established in accordance with this paragraph, or property the value of which corresponds to such proceeds (productum sceleris). Incomes or other advantages derived from the proceeds of the crime, property into which the proceeds have been transformed or converted or property with which such proceeds have been intermingled may also be confiscated, unless this would prejudice the rights of bona fide third parties. The burden of proving the lawful origin of the presumed proceeds of the crime or of other property liable to confiscation may be placed on the defendant[2]. These rules on confiscation have been incorporated into several other binding international provisions such as Articles 77 (2) (b), 93 (1) (k), and 109 (1) of the Rome Statute of 1998 of the International Criminal Court[3], Article 8 of the 1999 International Convention for the Suppression of the Financing of Terrorism[4], Article 12 of the UN Convention of 2000 against Transnational Organised Crime[5], Article 31 of the UN Convention of 2003 against Corruption[6], and Article 16 of the 2003 Convention of the African Union on Preventing and Combating Corruption[7].

The international rule in matters of confiscation is firmly anchored in Europe. In the Council of Europe framework, Articles 2 and 13 of the Council’s 1990 Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime already provided for the confiscation of the instruments and proceeds of crime, confiscation of the equivalent value and confiscation without criminal conviction[8]. Articles 5 and 23 of the 2005 Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime and the Financing of Terrorism further clarified the previous provisions[9].

The current legal framework of the European Union in respect of confiscation of the instruments and proceeds of crime comprises several texts: Framework Decision 2001/500/JHA, which requires Member States not to make or uphold reservations in respect of the provisions of the Council of Europe Convention on confiscation where the offence is punishable by deprivation of liberty or a detention order of a maximum period of more than one year, to authorise value confiscation where the direct proceeds of the crime cannot be apprehended and to ensure that requests from other Member States are given the same degree of priority as domestic procedures[10]; Framework Decision 2003/577/JHA, which provides for mutual recognition of freezing orders; Framework Decision 2005/212/JHA, which provides for ordinary confiscation, including value confiscation, in respect of all offences subject to imprisonment of a maximum period of one year, and confiscation of some or all assets held by a person who has been found guilty of specified serious offences, where they have been “committed within the framework of a criminal organisation”, without establishing a link between the assets deemed to be of criminal origin and a specific offence; Framework Decision 2006/783/JHA, which provides for mutual recognition of confiscation orders; and Council Decision 2007/845/JHA concerning cooperation between the Asset Recovery Offices of Member States [11].

Lastly, a sound opinio juris in favour of international rules on the confiscation of the instruments and proceeds of crime has emerged with the adoption by several international organisations of recommendations and best-practice guides, such as Recommendation no. 3 of the OECD’s international Financial Action Task Force (FATF) as revised in February 2012[12]. The FATF has suggested that the States adopt similar measures to those laid down in the Vienna and Palermo Conventions, including legislation, to enable their competent authorities to confiscate laundered assets, the proceeds of money laundering or predicate offences, and the instruments used in or intended for the commission of such offences, or assets of corresponding value, without prejudice to the right of bona fide third parties. The FATF considers that States should envisage adopting measures to allow confiscation of such proceeds or instruments without a prior conviction or to require the presumed perpetrator of the offence to demonstrate the lawful origin of the assets alleged to be liable to confiscation, in so far as such a requirement complies with the principles of their domestic legislation. The third of the FATF’s nine special recommendations on the financing of terrorism reinforces this proposal where the freezing and confiscation of terrorists’ assets are concerned.

It must be concluded from the established and virtually universal practice of States and the above-mentioned opinio juris that there is currently a six‑pronged international customary norm in matters of confiscation of the instruments and proceeds of crime: confiscation of instruments used in or intended for the commission of the crime, confiscation of the proceeds of the crime, confiscation of their equivalent value, confiscation of proceeds which have been transformed or intermingled with other assets, confiscation of incomes and other indirect benefits[13] and protection of bona fide third parties[14]. Mandatory confiscation of the instruments and proceeds of crime, in accordance with the extensive procedures described, covers the largest possible number of criminal offences, and at the very least those created in accordance with the aforementioned conventions. This universal rule in respect of confiscation of the instruments and proceeds of crime represents a minimum threshold, and the States may elect to go further in their domestic legislation.

The confiscation of the instruments and proceeds of crime in the Court’s case-law

The Court has hitherto avoided ruling on the point of principle of the compatibility with the Convention of confiscation without criminal conviction and enlarged confiscation. The questions arising have often been decided on the basis of secondary aspects of the legal regulations governing the measure implemented by the respondent State, or even on the basis of highly specific facts pertaining to each individual case, such as the total assets lost by the applicant. This casuistic approach has produced conflicting and inconsistent case-law.

According to the Court, the safeguards set out in Articles 6 §§ 2-3 and 7 of the Convention and Article 4 of Protocol No. 7 do not apply to the measure laid down in section 2 ter of the Italian Law no. 575/1965 (now Article 24 of the Anti-Mafia Code introduced under Legislative Decree No. 159 of 6 September 2011), which concerns the confiscation of property belonging directly or indirectly to any person suspected of belonging to a mafia-type association, where the value of such property appears disproportionate to the person’s income or economic activities or where it can be reasonably contended, on the basis of available evidence, that such property constitutes the proceeds of unlawful activities, if no satisfactory explanation has been provided in defence of its lawful origin[15]. The same applies to confiscation in civil proceedings in rem[16]. In the same way the Court considers that confiscation measures can be applied to third persons following the defendant’s conviction in criminal proceedings or even after the latter’s death. The Court does, however, consider the compatibility of this type of measure with the civil-law aspect of Article 6 and with Article 1 of Protocol No. 1[17]. Lastly, it also accepts the implementation of confiscation measures vis-à-vis defendants who have been acquitted or discharged on grounds other than acquittal at the close of criminal proceedings[18], as well as during the phase following the conviction which is an integral part of the sentencing process[19].

On the other hand, the Court does consider that confiscation as provided for in section 19 of Law no. 47 of 1985 is surrounded by the safeguards of Article 7 of the Convention[20]. Yet, as we shall see, the application of this measure has to comply with much stricter conditions than confiscation under the anti-mafia regulations. In the context of an equivalent value confiscation in Greece, the Court did not grasp the full impact of the terms used, which drew what the Court considered to be an artificial distinction between a finding of guilt and a finding of “objective” perpetration of an offence as the basis for a confiscation order, and concluded that there had been a violation of Article 6 § 2 of the Convention[21]. In another case it even reached the conclusion that the confiscation had been “a measure ... inappropriate to assets which [were] not known to have been in the possession of the person affected, the more so if the measure concerned relate[d] to a criminal act of which the person affected ha[d] not actually been found guilty”, since Article 6 § 2 prohibits such a measure[22].

Accordingly, beyond the contradictions in the various cases concerning measures which are substantially analogous, the Court affords weaker safeguards for more serious, indeed more intrusive, confiscation measures, and stronger guarantees for less serious confiscation measures. Some “civil-law” measures and some “crime prevention” measures which disguise what is in effect action to annihilate the suspect’s economic capacities, sometimes on threat of imprisonment should they fail to pay the sum due, are subject to weak, vague supervision, or indeed escape the Court’s control, while other intrinsically administrative measures are sometimes treated as equivalent to penalties and made subject to the stricter safeguards of Articles 6 and 7 of the Convention[23].

The nature of confiscation on grounds of unlawful land development

In a judgment of 12 November 1990 the Italian Court of Cassation ruled that the confiscation provided for in section 19 of Law no. 47 of 1985 was a mandatory administrative sanction, irrespective of any criminal conviction and the mens rea of the offence[24]. It considered that the measure could therefore be ordered in respect of third persons because the confiscation was based on a situation – buildings and/or land development – which was materially unlawful, irrespective of the mens rea. The court held that confiscation could therefore be ordered in cases where the defendant had been acquitted on the grounds of absence of mens rea (perché il fatto non costituisce reato), but could not be ordered where the defendant had been acquitted on the grounds that the actus reus of the offence had not been made out (“perché il fatto non sussiste”).

The Court of Cassation introduced two significant exceptions to this principle, the first being that of bona fide third persons uninvolved in the commission of the offence[25], and the second that of the offence of unlawful land development becoming time-barred before the commencement of criminal proceedings[26]. In the Court of Cassation’s view, confiscation was excluded in these two cases.

In Sud Fondi the Court decided otherwise. It held that the measure provided for in section 19 of Law no. 47 of 1985 was geared not to providing pecuniary compensation for damage but primarily to punishing the defendant in order to prevent a recurrence of infringements of the conditions laid down in law. This conclusion was reinforced, in its view, by the fact that 85% of the land affected by the confiscation order was undeveloped, and therefore there had been no real damage to the environment. The Court noted the severity of the actual penalty, which affected all the land covered by the development plan, that is, a total area of 50,000 m2. It also stressed that the Building Code of 2001 classified confiscation for unlawful development as a criminal penalty.

It is highly questionable to classify confiscation as a “penalty” under the criteria both of traditional criminal theory and those – deriving from the Engel case-law – on the legal classification of the offence under Convention law. The national legislation is unclear because sections 19 and 20 of Law no. 47 of 1985 do not mention confiscation as a criminal sanction, unlike Article 44 of the Building Code (DPR no. 380 of 2011), which reworded the said sections. In so far as confiscation is intended to deter real-estate speculation incompatible with spatial planning and environmental protection regulations, its preventive nature is plain to see. The same cannot be said of its alleged “penal” and “punitive” nature. It is not enough, in order to justify this “punitive” aim, simply to consider the percentage of undeveloped plots of land confiscated, even less so the total area of land confiscated. The actual severity of a criminal sanction can only confirm its criminal nature; it cannot replace it. The “punitive” nature of the confiscation cannot depend on its actual severity. Any conclusion regarding the nature of the confiscation must derive from the legal regime governing it, as established by law and interpreted and applied by case-law. In order to obviate the problem of “mislabelling”, which is recurrent in this field, we should remember the wise words of Celsius: scire leges non hoc est: verba earum tenere, sed vim ac potestatem (knowing the law means comprehending the spirit and force rather than the letter thereof).

Indeed the “punitive” aim is contradicted by the fact that the property confiscated in accordance with section 19 of Law no. 47 of 1985 is acquired not by the State, as in the case of the criminal confiscation laid down in section 240 of the Criminal Code, but by the local authorities, and the confiscation can be revoked if these authorities regularise the land development ex post facto[27]. In modern criminal law, a penalty cannot be revoked under a retroactive administrative decision. The separation of powers principle would proscribe this. If the administrative authorities can validate the land development subsequent to a final judicial confiscation decision and revoke the latter measure, one must conclude that the criminal court making that decision does not have the last say regarding the lawfulness of the development plan. Confiscation as laid down in section 19 of Law no. 47 of 1985 is, precisely, a provisional and interim measure designed to guard against the danger of real-estate operations incompatible with legal and administrative provisions pending a final decision by the relevant administrative authority on the lawfulness of the development in question. In other words, the criminal court provisionally replaces the administrative authorities (in funzione di supplenza) in their role as guarantor of the public interest in the spatial planning and environmental protection field. This conclusion is confirmed by other important aspects of the statutory rules: criminal proceedings have no suspensive effect on administrative proceedings[28], and the administrative authorities can even prevent the issuing of a confiscation order by the criminal court before it becomes res judicata if it authorises the development operation ex post facto or modifies the local development plan in such a way that the developed land is classified as building land[29]. Furthermore, it can validate buildings constructed without permission if they comply with current town planning regulations at the time of the decision on the application for validation, even if they were incompatible with the regulations in force at the time of construction of the unlawful development[30]. All these aspects of the legal regime inevitably lead to the conclusion that confiscation on grounds of unlawful land development is administrative in nature and does not depend on verification of the existence at the material time of the objective (actus reus) and subjective (mens rea) conditions for applying “penalties”, even where the confiscation is imposed by a criminal court following criminal proceedings. The constitutional concept of the “social function of ownership” (funzione sociale della proprietà) is not unconnected to the way in which administrative confiscation is regulated[31].

From the standpoint of the Convention, therefore, confiscation for unlawful land development can only be considered as an “interference” with property rights which is “necessary to control the use of property in accordance with the general interest”, the legitimacy of which must be assessed on the basis of the lawfulness and proportionality criteria set out in Article 1 of Protocol No. 1, and certainly not as a “penalty” subject to the conditions set out in Article 7 of the Convention[32].

The lawfulness of confiscation on grounds of unlawful land development

The legal basis for the confiscation ordered by the Italian courts – section 19 of Law no. 47 of 1985 – is not contested[33]. The subject of the dispute between the parties is rather the procedure for implementing the measure. On the one hand the Government contend that the actus reus and mens rea of the offence of unlawful spatial planning were made out because of the existence of landscape constraints, as shown by the Puglia Administrative Court decision of 10 March 1993, the lack of a legitimate development plan, and the fact that the applicant had apparently been fully aware of both those factors. On the other hand the applicant submits that the administrative court decision had rendered the ministerial decree of 1 August 1985 inoperative and had thus removed the legal basis for the confiscation decision given by the criminal court.

It should be recalled that the charge against the applicant was that the new variant of the development plan approved in 1994, the original plan having been approved in 1984, had not been a mere modification of the 1984 plan but a completely new project which was subject to the obligation of applying for and obtaining a favourable opinion from the regional committee responsible for town and spatial planning. In the absence of a fresh land development plan and the said favourable opinion, the court of first instance ruled the development plan unlawful on grounds of breach of the ministerial decree of 1 August 1985. This charge was upheld neither by the Bari Court of Appeal in its judgment of 22 January 2001[34] nor by the Court of Cassation in its judgment of 10 December 2004[35], but it was upheld by the Bari Court of Appeal in its judgment of 5 May 2003 and by the Court of Cassation in its judgment of 17 May 2002. Lastly, in its judgment of 23 March 2006, the Bari Court of Appeal held that the variant constituted a fresh land development plan and was therefore unlawful. In conclusion, it ordered the confiscation of the buildings and the developed and undeveloped land. The Court of Cassation upheld this approach in its judgment of 11 June 2008. In themselves, the far-reaching divergences among the various domestic judicial authorities highlight the dubious character of the interpretation finally adopted as regards the nature of the land development agreement concluded in August 1994 and of the resultant building permits, and therefore of the criminal offence with which the applicant was charged. Moreover, the municipality of Cassano delle Murge declared the buildings constructed by the applicant before 30 September 2004 in conformity with landscape legislation, and the Soprintendenza per i Beni Ambientali even concluded, after a site inspection, that the “building operation had not caused any specific damage to the integrity of the wooded area”[36]. At any event, even giving the respondent State the benefit of the doubt regarding the “natural character” of the Mercadante forest, the “essential” nature of the change (“modifica essenziale”) caused by the modification of the original plan and therefore the unlawfulness of the development agreement concluded in August 1994, and the lawfulness of the ensuing confiscation, consideration of the proportionality of the confiscation measure leads to an unfavourable finding in the respondent State’s regard.

The proportionality of the confiscation for unlawful development

Any measure interfering with the right of property must be proportionate. This conclusion applies a fortiori to property holders who cannot be blamed for any unlawful conduct, whether in criminal, administrative or civil-law terms. The scope of confiscation must therefore be confined to what is strictly necessary for attaining specific preventive aims and the overall “public interest” purpose of any measure interfering with the right of property in the context of the instant case.

According to the interpretation adopted by the Italian courts, confiscation for unlawful development is automatically implemented in respect of buildings and also plots of land (all plots of land, not only developed ones)[37]. The confiscation measure applied in the present case is manifestly disproportionate, for several reasons[38]. Firstly, the undeveloped plots of land accounted for over 90% of those confiscated. Secondly, the confiscation was not confined to the changes effected under the 1994 agreement, but was extended to the development which had already been authorised in 1984. Thirdly, even if one accepted the hypothesis that the land development was unlawful, the defect would concern non-compliance with a landscape constraint necessitating a favourable opinion from the relevant regional committee, that is to say a “relative procedural defect” (vincolo d’inedificabilità relativo), which is potentially surmountable, not an unsurmountable substantive defect, which would be the case of an absolute prohibition on building. Fourthly, given that the offence had become time-barred at the end of 2001, as contended by the applicant, or at the end of 2002, as the Bari Court of Appeal held, the maintenance from February 1997 until the end of criminal proceedings in June 2008 of the interim attachment order over the land and buildings constitutes an excessive interference. Fifthly, it does not seem reasonable that the municipality responsible for issuing unlawful building permits should benefit from its own wrongdoing.

The rigid interpretation of confiscation on grounds of unlawful land development as “an expropriation measure which is radical in both its form and its consequences” (un provvedimento ablativo radicale, nelle forme e nelle conseguenze), whereby “without any discretion, ownership of the developed land and property is transferred from individuals to the municipality” (senza discrezionalità alcuna, la proprietà dei terreni e dei beni lottizzati venga trasferita dai privati al patrimonio del comune)[39], is plainly in breach of the principle of proportionality. That principle requires a different interpretation of the “form” and “consequences” of confiscation which the domestic courts can and must follow in the light of Articles 42 and 44 of the Italian Constitution and Article 1 of Protocol No. 1. If the aim of the measure consisting in confiscating developed land and unlawful buildings is to put a stop to criminal activities and the proceeds of such crime and to prevent any worsening of the damage to spatial planning and the environment until the administrative authorities reach a final decision on the lawfulness of the development plan, the corresponding judicial action must be measured and neither “absolute” nor “automatic”. Accordingly, the Italian court must not only ascertain whether there is, in concreto, an immediate serious risk to spatial planning and environmental protection considerations, but also tailor the State’s reaction to the existing real-estate threat, thus ensuring that the confiscation measure is proportionate to the specific circumstances of the case[40].

Conclusion

According to UN estimates, in 2009 the total of all proceeds of crime at world level stood at almost 2,100 billion US dollars, or 3.6 % of global GNP[41]. In response to this global problem, an international customary norm imposing confiscation as a criminal policy measure has emerged in respect of both the instruments and the proceeds of crime, except in cases of bona fide third persons. Under the nomen juris of confiscation, the States have introduced ante delictum criminal prevention measures, criminal sanctions (accessory or even principal criminal penalties), security measures in the broad sense, administrative measures adopted within or outside criminal proceedings, and civil measures in rem. Confronted with this enormous range of responses available to the State, the Court has not yet developed any consistent case-law based on principled reasoning.

In connection with confiscation on grounds of unlawful land development as provided in section 19 of Law no. 47 of 1985, while its implementation in the absence of a criminal conviction, irrespective of the cause of the discontinuance of criminal proceedings, is compatible with the Convention, its scope is at variance with the latter. A measure automatically and absolutely ordering the confiscation of buildings and unlawfully developed land is in breach of the principle of proportionality. This applies to the confiscation implemented in respect of the applicant. I therefore conclude that there has been a violation of Article 1 of Protocol No. 1, and also that there has been no violation of Article 7 of the Convention.

[1]. Sud Fondi srl and Others v. Italy, no. 75909/01, 20 January 2009, and the two partial admissibility decisions given on 23 September 2004 and 30 August 2007.

[2]. The Convention has had 188 States Parties, including the respondent State, since 31 December 1991. Article 1 of the Convention defines confiscation as “the permanent deprivation of property by order of a court or other competent authority”. The other UN texts incorporate the same definition.

[3]. The Rome Statute has had 122 States Parties, including the respondent State, since 26 July 1999. Moreover, Article 110 (4) (b) provides for the possibility of reduction of sentence in cases where a defendant offers voluntary assistance in enabling the enforcement of the judgments and orders of the Court in other cases, and in particular providing assistance in locating assets subject to forfeiture which may be used for the benefit of victims.

[4]. This Convention has had 185 States Parties, including the respondent State, since 27 March 2003.

[5]. This Convention has had 178 States Parties, including the respondent State, since 2 August 2006.

[6]. This Convention has had 168 States Parties, including the respondent State, since 5 December 2009. A major innovation was introduced by Article 54 (1) (c) of the Convention against Corruption, requiring the States Parties, in the framework of international cooperation in confiscation, to allow confiscation of property acquired by means of a criminal offence without a criminal conviction in cases in which the offender cannot be prosecuted by reason of death, flight or absence or in other appropriate cases. An explanatory note states that in this context the term “offender” could, in appropriate cases, include persons holding ownership rights with a view to disguising the identities of the true owners of the property in question (A/58/422/Add.1, par. 59). Even if this provision is optional, it constitutes a universal recognition of confiscation without conviction. Regarding the domestic practice in individual States, see the legislation of 175 countries on asset recovery, consultable on the UNODC website.

[7]. This Convention has 31 States Parties. Article 1 defines confiscation as “any penalty or measure resulting in a final deprivation of property, proceeds or instrumentalities ordered by a court of law following proceedings in relation to a criminal offence or offences connected with or related to corruption”.

[8]. ETS no. 141 and its explanatory report. This Convention has had 48 States Parties, including the respondent State, since 1 May 2004. Article 1 defines confiscation as “a penalty or a measure, ordered by a court following proceedings in relation to a criminal offence or criminal offences resulting in the final deprivation of property”. This definition now forms the cornerstone of the Council of Europe and European Union texts on this subject. This 1990 Convention excluded confiscation unrelated to a criminal offence, such as administrative confiscation, but included any decision to confiscate which had not been taken by a court holding criminal jurisdiction following criminal proceedings, provided that such proceedings were conducted by judicial authorities and were criminal in nature, that is to say they concerned the instruments or proceeds of crime. Such proceedings could embrace, for instance, so-called in rem proceedings and were referred to in the Convention as “proceedings for the purposes of confiscation”.

[9]. CETS no. 198 and its explanatory report. This Convention has 23 States Parties. The respondent State has signed but not ratified it. The new paragraph 5 of Article 23 of the Convention stipulates, in the body of the text, that cooperation on the execution of measures leading to confiscation, which are not criminal sanctions, must be ensured to the widest extent possible. As the explanatory report to this 2005 Convention acknowledges, it was clear that already under the 1990 Convention, the Parties had enjoyed leeway in their approach to confiscation under their domestic legal system, one possible approach being civil proceedings in rem.

[10]. This Framework Decision partly abrogates Common Action 98/699/JAI on identifying, tracing, freezing, seizing and confiscating the instrumentalities and proceeds of crime.

[11]. The Proposal for a European Parliament and Council Directive on freezing and confiscating the proceeds of crime in the European Union, adopted in 2012, provided for confiscation without a criminal conviction where the defendant cannot be prosecuted because of death, illness or abscondance; enlarged confiscation in so far as a court has found, on the basis of factual evidence, that a person found guilty of an offence is in possession of assets which are distinctly more likely to have originated in other similar criminal activities than in a different type of activity, and confiscation of the assets of third parties where the third-party purchaser, having paid under the market value, should have suspected that the property was of criminal origin (COM(2012) 85 final). In its report on the Proposal for a Directive drawn up in May 2013, the Committee on Civil Liberties, Justice and Home Affairs pointed out that this Directive only covered forms of non-conviction-based confiscation which were considered as being of a criminal nature (COM(2012)0085 – C7-0075/2012 – 2012/0036(COD); and the opinion issued on this subject in December 2012 by the EU Fundamental Rights Agency). The legislative procedure is still at this same stage. There is evident disagreement between the Council of Europe’s approach, which opens the door to measures leading to non-conviction-based confiscation which are not “criminal sanctions”, even if these are imposed following criminal proceedings, and the approach adopted by the European Parliament Committee on Civil Liberties, which makes non-conviction-based confiscation subject to the Convention safeguards attached to any “penalty” and, explicitly, to the provisions of Article 6 of the Convention. 

[12]. See also Security Council Resolutions 1267 (1999), 1373 (2001) and 1377 (2001) on the financing of terrorism and the Security Council Technical Guide for Implementation of Resolution 1373 (2001), as well as the following documents: G8 Best Practice Principles on Tracing, Freezing and Confiscation of Assets, 2003; Commonwealth Model Legislative Provisions on Civil Recovery of Assets including Terrorist Property, 2005 ; Model Bilateral Agreement on the Sharing of Confiscated Proceeds of Crime or Property covered by the United Nations Convention against Transnational Organized Crime and the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988, 2005; Biens mal acquis : Un guide des bonnes pratiques en matière de confiscation d'actifs sans condemnation (CSC) (“Stolen asset recovery: a good practices guide for non-conviction based asset forfeiture”), 2009, and Barriers to Asset Recovery An Analysis of the Key Barriers and Recommendations for Action, 2011, published by the International Bank for Reconstruction and Development and the World Bank; and also the work of the Open-ended Intergovernmental Working Group on Asset Recovery set up by the Conference of States Parties to the United Nations Convention against Corruption.

[13]. As an interpretative note on equivalent wordings in the Convention against Organised Crime points out, the words “other benefits” must encompass material benefits as well as legal rights and interests of an enforceable nature which are subject to confiscation (A/55/383/Add.1, par. 23).

[14]. Even if they share an identical content, the treaty-based rules do not replace the customary norms: the two coexist in parallel, because the treaty-based rule applies only to States Parties whilst the customary norm applies to all States. Furthermore, international custom can govern not only inter-State relations but also relations between States and individuals, because it is directly applicable under the domestic legal system and, under certain circumstances, can be relied upon by individuals. For example, international custom may include not only substantive penal rules such as the prohibition of a retroactive penal law but also procedural penal rules such as the “natural or lawful judge” rule in penal law (see my separate opinion in Maktouf and Damyanovic v. Bosnia-Herzegovina (GC). The present opinion cannot go any further into this issue.

[15]. Raimondo v. Italy, 22 February 1994, Series A no. 281-A, p. 17, §§ 30 and 43; Prisco v. Italy (dec.), no. 38662/97, 15 June 1999; Arcuri and Others v. Italy (dec.), no. 52024/99, 5 July 2001; and Riela and Others v. Italy (dec.), no. 52439/99, 4 September 2001. This preventive penal measure, which had traditionally been treated as an administrative measure equivalent in content and effects to a security measure (Court of Cassation, combined chambers, judgment of 3 July 1996, no. 18), has recently been seen as “objectively punitive” (oggetivamente sanzionatoria) and therefore subject to the rule that penalties shall not be applied retrospectively (Court of Cassation, judgment of 13 November 2012, no. 14044/13). The measure is  applicable even when the supposed danger posed by the suspect can no longer be regarded as real or in the event of his or her death, and can potentially cover the entirety of the suspect’s assets available de jure or de facto (Constitutional Court, judgment of 9 February 2012, no. 21).

[16]. See AGOSI v. the United Kingdom, 24 October 1986, Series A no. 108, §§ 34, 56-62 (re. sections 44 (b) and 44 (f) of the 1952 Act); Air Canada v. United Kingdom, 13 July 1995, Series A no. 316, § 52 (re. section 141 of the 1979 Act, which provided no protection for innocent third parties); Butler v. the United Kingdom (dec.), no. 41661/98, 27 June 2002; Webb v. the United Kingdom (dec.), no. 56054/00, 10 February 2004; and Saccoccia v. Austria, no. 69917/01, §§ 87-91, 18 December 2008. In the last two UK cases the Court explicitly found that the confiscation order had been a “preventive measure” which could not be treated as equivalent to a criminal sanction because it had been geared to taking out of circulation sums of money which were presumed to be linked to international trafficking in narcotic drugs.

[17]. See Yildirim v. Italy (dec.), no. 38602/02, ECHR 2003-IV, and C.M. v. France (dec.), no. 28078/95, 26 June 2001. In Silickienė v. Lithuania, no. 20496/02, § 50, 10 April 2012, however, the Court established the opposite principle: it held that although “as a general principle, persons whose property is confiscated should be formally granted the status of parties to the proceedings in which the confiscation is ordered”, it accepted, “in the particular circumstances of the case”, the confiscation of property belonging to third persons following the defendant’s death during criminal proceedings.

[18]. See Van Offeren v. the Netherlands (dec.), no. 19581/04, 5 July 2005, where the applicant had had to pay the € 162,026.31 confiscated, on threat of an eighteen-month prison sentence if he failed to pay the confiscated sum; Waldemar Nowakowski v. Poland, no. 55167/11, §§ 51-58, 24 June 2012; and, in a similar case in which a demolition order had been issued in respect of a suspect acquitted following criminal proceedings, Saliba v. Malta (dec.), no. 4251/02, 23 November 2004.

[19]. See Phillips v. the United Kingdom, no. 41087/98, § 34, ECHR 2001‑VII (relating to the Drug Trafficking Act 1994), where the applicant had had to pay the £ 91,400 confiscated, on threat of an additional two-year prison sentence; Grayson and Barnham v. the United Kingdom, nos. 19955/05 and 15085/06, § 49, 23 September 2008 (relating to the same Act), in which the first applicant had had to pay the £ 1,236,748 confiscated, on threat of an additional eight-year prison sentence, and the second applicant £ 1,460,615, on threat of a prison sentence of five years and three months; and Woolley v. the United Kingdom, no. 28019/10, §§ 80-84, 10 April 2012 (relating to section 75 of the Criminal Justice Act 1988 and section 139 of the Criminal Courts (Sentencing) Act 2000, in which the applicant had had to serve four years’ imprisonment in addition to his sentence because he had failed to pay the £ 497,784.02 confiscated.

[20]. See Sud Fondi srl and Others v. Italy (dec.), no. 75909/01, 30 August 2007, and also Welch v. the United Kingdom, no. 17440/90, § 33, 9 February 1995 (relating to the Drug Trafficking Act 1986).

[21]. See Paraponiaris v. Greece, no. 42132/06, § 33, 25 September 2008.

[22]. See Geerings v. Netherlands, no. 30810/03, § 47, 1 March 2007 (re Article 36e of the Criminal Code), in which the applicant had had to pay 147,493 Netherlands guilders on threat of a 490-day prison sentence.

[23]. The repercussions of the Court’s case-law can be considerable in cases of enlarged confiscation as a measure to attach property in general (e.g. Article 43a of the German Criminal Code and Article 229-49 of the French Penal Code), property having an unlawful purpose (e.g. § 72 of the Swiss Criminal Code and § 20b of the Austrian Criminal Code) and property suspected of having an unlawful origin (e.g. § 73d of the German Criminal Code, section 20b (2) of the Austrian Code and section 7 of the Portuguese Law no. 5/2002).

[24]. The Constitutional Court upheld this line of reasoning in judgment no. 187 of 1998.

[25]. Court of Cassation, judgment no. 427 of 24 October 2008, judgment no. 36844 of 9 July 2009, and judgment no. 397153 of 6 October 2010.

[26]. Court of Cassation, judgment no. 5857 of 16 February 2011.

[27]. Court of Cassation, judgment no. 12999 of 14 December 2000, and judgment no. 1966 of 21 January 2002. However, the Court of Cassation also held, in its judgment no. 21125 of 29 May 2007, that the administrative validation (sanatoria amministrativa) of the unlawful land development after the confiscation decision had become res judicata did not mean that the confiscated property had to be restored to the previous owners. As we shall see below, this aspect of the statutory rules raises proportionality issues.  

[28]. An administrative order for the demolition of unlawful buildings may be enforced during criminal proceedings (Consiglio di Stato, judgment no. 1260 of 12 March 2012, and Court of Cassation, judgment no. 9186 of 14 January 2009).

[29]. Court of Cassation, judgments nos. 39078 of 8 October 2009 and 21125 of 29 May 2007.

[30]. Consiglio di Stato, judgments nos. 6498 of 21 October 2003 and 2835 of 7 May 2009.

[31]. Court of Cassation, judgments nos. 10037 of 27 January 2005 and 37472 of 2 October 2008.

[32]. The Court’s reasoning and position on confiscation must take into account the submissions to some domestic courts on the constitutional limits of confiscation, as in the debate in the USA on the application to specific forms of confiscation of the 8th Amendment on cruel punishment, or the discussion in Germany on the constitutionality of general confiscation (see, for example, the German Constitutional Court judgments of 20 March 2002 and 14 January 2004).  

[33]. On the unlawfulness of confiscation measures, see Frizen v. Russia, no. 58254/00, § 36, 24 March 2005; Baklanov v. Russia, no. 68443/01, § 46, 9 June 2005; and Adzhigovich v. Russia, no.  23202/05, § 34, 8 October 2009.

[34]. The Court of Appeal held that the Mercadante forest was not a “natural forest” (bosco naturale) but an “artificial forest” (bosco artificiale), as the prosecution expert confirmed at the 23 March 1998 hearing; that section 1 of Law no. 431/85 had been repealed by section 146 of Legislative Decree No. 490/99, apart from the landscape constraint on the plots of land in question; that the variant of the original development plan had not constituted an “essential change” (modifica essenziale) to the development plan approved in 1984; and lastly that the buildings erected by the applicant did not constitute a “substantial change to the environmental parameters of the area” (modifica sostanziale dei parametri paesistici dell’ area).

[35]. The Court of Cassation criticised the 5 May 2003 judgment of the Bari Court of Appeal for failing to assess independently whether the variant had “concealed a new, separate development plan” (mascherava un nuovo ed autonomo piano di lottizzazione).

[36]. Judgment of the Bari Court of Appeal of 22 January 2001, page 11: “l’intervento edificatorio posto in essere non abbia comportato specifico pregiudizio all’integrità complessiva dell’area buscata”.

[37]. Court of Cassation, judgment no. 17424 of 9 May 2005: “la confisca deve essere estesa a tutta l’area interessata dall’intervento lottizzatorio, compresi i lotti non ancora edificati o anche non ancora alienati al momento dell’accertamento del reato, atteso che anche tali parti hanno perso la loro originaria vocazione e destinazione rientrando nel generale progetto lottizzatorio.”

[38]. On the disproportionality of confiscation measures, see Ismayilov v. Russia, no. 30352/03, § 38, 6 November 2008, and in particular Grifhorst v. France, no. 28336/02, § 100, 26 February 2009 (“automatic” confiscation of the “entirety” of the sum transported).

[39]. Court of Cassation, judgment no. 21125 of 29 May 2007; see also Constitutional Court judgment no. 239 of 24 June 2009.

[40]. For example, the court must draw a distinction between an “environmental monster” (ecomonstro) created by a greedy, ill-intentioned developer playing hide-and-seek with the administrative authorities and a building constructed with the implicit or explicit consent of the competent administrative authorities and voluntarily discontinued by the developer. A different set of measures would be required in each of these two cases. 

[41]. United Nations Office on Drugs and Crime, “Estimating illicit financial flows resulting from drug trafficking and other transnational organised crime”, October 2011.

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