E.L., R.L. AND J.O.-L. v. SWITZERLAND



                      AS TO THE ADMISSIBILITY OF

                      Application No. 20919/92

                      by E. L., R. L. and J. O.-L.

                      against Switzerland

      The European Commission of Human Rights sitting in private on

16 October 1995, the following members being present:

           MM.   H. DANELIUS, Acting President

                 S. TRECHSEL

                 C.L. ROZAKIS

                 E. BUSUTTIL

                 A.S. GÖZÜBÜYÜK

                 A. WEITZEL

                 J.-C. SOYER

                 H.G. SCHERMERS

           Mrs.  G.H. THUNE

           Mr.   F. MARTINEZ

           Mrs.  J. LIDDY

           MM.   L. LOUCAIDES

                 J.-C. GEUS

                 M.P. PELLONPÄÄ

                 G.B. REFFI

                 M.A. NOWICKI

                 I. CABRAL BARRETO

                 B. CONFORTI

                 N. BRATZA

                 I. BÉKÉS

                 J. MUCHA

                 E. KONSTANTINOV

                 G. RESS

                 A. PERENIC

                 C. BÎRSAN

                 P. LORENZEN

                 K. HERNDL

           Mr.   H.C. KRÜGER, Secretary to the Commission

      Having regard to Article 25 of the Convention for the Protection

of Human Rights and Fundamental Freedoms;

      Having regard to the application introduced on 29 October 1992

by E. L., R. L. and J. O.-L. against Switzerland and registered on

6 November 1992 under file No. 20919/92;

      Having regard to :

-     the reports provided for in Rule 47 of the Rules of Procedure of

      the Commission;

-     the observations submitted by the respondent Government on

      15 November 1994 and the observations in reply submitted by the

      applicants on 10 and 11 January, 10 February and 14 June 1995;

      Having deliberated;

      Decides as follows:

THE FACTS

      The facts of the case, as submitted by the parties, may be

summarised as follows.

      The applicants, Swiss citizens, are the heirs of Mr. L. who died

on 7 October 1985.  The first applicant, a housewife born in 1922 and

residing at Sarnen, is L.'s widow.  The second applicant, a businessman

born in 1951 and residing at Sarnen, and the third applicant, a

housewife born in 1956 and residing at Ennetmoos, are the children of

L.  In the proceedings before the Commission, they are represented by

Mr. R. Küchler, a lawyer practising in Lucerne.

Particular circumstances of the case

      L. was the proprietor of a mail-order company.  It appears that

he had not reported to the tax authorities certain monies earned in

Germany.  Following the advice of a tax adviser, he informed the Sarnen

Municipal Tax Office (Gemeindesteueramt) on 21 December 1984 thereof,

namely that he had not declared the amount of 270,000 SFr.

      After the applicant's death on 7 October 1985 the Tax

Administration (Steuerverwaltung) of the Canton of Obwalden informed

the first applicant on 29 October 1985 of the institution of tax and

criminal tax proceedings.

      On 7 January 1986 the period expired during which the applicant's

heirs could have refused the heritage (see below, Relevant domestic

law).

      On 18 August 1990 the Tax Administration found that L. had

committed tax evasion and ordered the applicants as heirs to pay taxes

of 13,227.90 SFr and a fine of 38,069.60 SFr.

      On 19 December 1989 the Cantonal Tax Appeals Board (Steuerrekurs-

kommission) of the Canton of Obwalden partly upheld the applicants'

appeal and reduced the taxes due to 1,481.30 SFr and the fine to

630.90 SFr.  The Appeals Board considered in particular that there were

no indications that the amount at issue had arisen from evaded monies.

The Appeals Board further found that the Tax Administration had not

sufficiently expressed itself on L.'s guilt.  However, it did not refer

the case back for renewed decision, finding that the applicants had had

sufficient opportunity to state their views before the Appeals Board

itself.  In respect of the liability of heirs the Appeals Board

referred to Section 130 para. 1 of the Ordinance on Federal Taxes

(Beschluss über die direkte Bundessteuer; see below, Relevant domestic

law).

      The Federal Tax Administration (Eidgenössische Steuerverwaltung)

then filed an administrative law appeal (Verwaltungsgerichtsbeschwerde)

which the Federal Court (Bundesgericht) upheld on 22 May 1992.

      In the Federal Court's opinion, the Appeals Board had incorrectly

distributed the burden of proof, as it fell to the taxpayer to prove

that any increase of fortune did not result from undeclared income.

The Court concluded that L. had deliberately evaded the entire amount

of 270,000 SFr and that L.'s heirs were liable to pay the incurred

fine, irrespective of their personal guilt.

      Insofar as the applicants maintained that the imposition of the

fine breached Article 6 para. 2 of the Convention, the Court referred

to its case-law according to which the fine concerned the deceased, not

the heirs, the latter merely being liable in respect of their part of

their inheritance which they were free to refuse.  A further

confirmation of this could be seen in the fact that the amount of the

fine was determined according to the culpability of the deceased.

      As a result, the Federal Court imposed taxes on the applicants

to the amount of 29,470.10 SFr and ordered the Appeals Board again to

determine the fine.

      On 4 February 1993 the Cantonal Appeals Board imposed a fine of

14,678.80 SFr on the applicants.  The applicants then filed an

administrative law appeal with the Federal Court in which they

complained of the amount imposed.

      On 9 January 1994, the Federal Court upheld the applicants'

administrative law appeal and referred the case back to the Cantonal

Appeals Board.  On 24 July 1995 the Cantonal Tax Appeals Board imposed

a fine of 5,513.80 SFr on the applicants.  No further appeal was fined

against this decision.

Relevant domestic law

                                  I.

      According to Section 48 para. 3 of the Swiss Penal Code

(Strafgesetzbuch), a fine is extinguished if the convicted person dies

(stirbt der Verurteilte, so fällt die Busse weg).

                                  II.

      Section 130 para. 1 of the Ordinance on Direct Federal Taxes

(Beschluss über die direkte Bundessteuer ) provides inter alia:

      "If the evasion is discovered only after the death of the person

      liable to pay taxes, proceedings are instituted and carried out

      against his heirs.  Irrespective of personal guilt, these will

      be jointly liable for the deceased person's evaded taxes and the

      fine incurred by him up to an amount not exceeding their share

      in the estate."

      "Wird die Hinterziehung erst nach dem Tode des Steuerpflichtigen

      entdeckt, so wird das Verfahren gegenüber seinen Erben angehoben

      und durchgeführt, und diese haften bis zur Höhe ihrer Erbteile

      solidarisch für die vom Erblasser hinterzogene Steuer und die von

      ihm verwirkten Bussen ohne Rücksicht auf ein eigenes

      Verschulden."

                                 III.

      Section 560 para. 4 of the Swiss Civil Code (Zivilgesetzbuch)

provides that, upon inheriting the estate, "the debts of the deceased

person shall become the personal debts of the heirs" ("die Schulden des

Erblassers werden zu persönlichen Schulden der Erben").  According to

Section 566 para. 1 of the Swiss Civil Code, "the legal and instituted

heirs have the possibility to refuse the inheritance which has fallen

to them" ("die gesetzlichen und eingesetzten Erben haben die Befugnis,

die Erbschaft, die ihnen zugefallen ist, auszuschlagen").

COMPLAINTS

      The applicants complain under Article 6 para. 2 of the Convention

that they have been convicted of an offence which they did not commit

and irrespective of any personal guilt.

      The applicants submit that in fact the proceedings were carried

out against them and not the deceased.  For instance, if the heirs

voluntarily report the tax evasion of the deceased to the tax

authorities, the fine will be reduced by one quarter.

PROCEEDINGS BEFORE THE COMMISSION

      The application was introduced on 29 October 1992 and registered

on 6 November 1992.

      On 5 September 1994 the Commission decided to communicate the

application to the respondent Government, pursuant to Rule 48

para. 2 (b) of the Rules of Procedure.

      The Government's written observations were submitted on

15 November 1994.  The applicants replied on 10 and 11 January 1995 and

10 February 1995.  They submitted further observations on 14 June 1995.

THE LAW

      The applicants complain under Article 6 para. 2 (Art. 6-2) of the

Convention that they have been convicted of an offence irrespective of

any personal guilt.

      According to Article 6 para. 2 (Art. 6-2) of the Convention,

"everyone charged with a criminal offence shall be presumed innocent

until proved guilty according to law".

      The Government contest, with reference to the decision of the

Federal Court, that the applicants were charged with a criminal

offence.  It is submitted that the proceedings at issue established the

guilt of the deceased, not of the applicants.  Furthermore, according

to Section 566 of the Swiss Civil Code, the applicants were not obliged

to accept the inheritance.  Indeed, the applicants only become liable

to the extent that they have inherited, and not in respect of the

entire estate.  Finally, the names of the heirs assuming the deceased's

fine will not be listed in the criminal register.

      The Government point out that under Swiss law the estate has no

legal personality and that the heirs, as it were, represent the

deceased in proceedings where only the latter, not the heirs, is the

accused.  By envisaging the responsibility of the heirs, the law aims

at discouraging a person from withdrawing taxes during his lifetime.

In the present case, the guilt of the deceased was established.

      In the applicants' opinion, the Government are begging the

question when they invoke the decision of the Federal Court to

substantiate their views.  In fact, it transpires from the case-law of

the Federal Court that criminal tax proceedings clearly fall under the

guarantees of Article 6 (Art. 6) of the Convention, and that the

statutory provisions on the punishment of tax evasion clearly

constitute criminal provisions.  The applicants find it difficult to

understand why a different solution should apply in the case of

proceedings instituted against the heirs of a person who evaded taxes.

It is not possible merely to charge the estate but not the heirs.  Even

if it is assumed that the deceased was culpable (schuldhaft), such

culpability cannot be transposed on the heirs.

      The applicants refer to various Swiss authors according to which

the liability of heirs for tax fines of the deceased clearly breaches

the presumption of innocence enshrined in Article 6 para. 2

(Art. 6-2) of the Convention.  This view is also maintained by certain

cantonal courts.

      Having examined these complaints the Commission finds that they

raise serious questions of fact and law which are of such complexity

that their determination should depend on an examination of the merits.

The application cannot, therefore, be regarded as being manifestly ill-

founded within the meaning of Article 27 para. 2 (Art. 27-2) of the

Convention, and no other ground for declaring it inadmissible has been

established.

      For these reasons, the Commission, unanimously,

      DECLARES THE APPLICATION ADMISSIBLE, without prejudging the

      merits of the case.

    Secretary to the Commission             Acting President

                                             of the Commission

           (H.C. KRÜGER)                      (H. DANELIUS)

 

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