ESV EUROFERMA S.R.L. AND OTHERS v. ROMANIA

FOURTH SECTION

DECISION

Application no. 18077/15
ESV EUROFERMA S.R.L. against Romania
and 3 other applications
(see list appended)

The European Court of Human Rights (Fourth Section), sitting on 17 December 2019 as a Committee composed of:

Faris Vehabović, President,
Iulia Antoanella Motoc,
Carlo Ranzoni, judges,
and Andrea Tamietti, Deputy Section Registrar,

Having regard to the above applications lodged on the various dates indicated in the appended table,

Having deliberated, decides as follows:

THE FACTS

1.  A list of the applicants, who are both Romanian nationals, and the applicant companies, which are both registered in Romania, is set out in the appendix. The applicants – Mr Ştefan Eugeniu Iancu and Mr Victor Octavian Iancu – are O.I.’s sons and A.M.I.’s nephews. The applicant company ESV Euroferma S.R.L. is co-owned and co-managed by the applicant Ştefan Eugeniu Iancu, together with A.M.I.’s son. The second applicant company, Uton S.A., is owned by O.I.The circumstances of the case

2.  The facts of the case, as submitted by the applicants, may be summarised as follows.

3.  By a decision of the prosecutor’s office attached to the High Court of Cassation and Justice dated 29 September 2005, nine people (including O.I. and A.M.I.) were tried for tax evasion and conspiracy to commit money laundering within the context of the privatisation of several State‑owned companies.

4.  On 28 November 2011 the Bucharest County Court convicted the defendants (including O.I. and A.M.I.) on several counts of tax evasion and money laundering. Jointly with certain other co-defendants, O.I. and A.M.I. were ordered to pay the equivalent of several billion euros in compensation for damage caused to the State budget by their criminal activity. In order to recover that money, the court decided to enforce seizure measures previously put in place in respect of the defendants’ assets by a decision of the prosecutor dated 12 January 2005 and a court order of 20 May 2010. All the defendants lodged appeals against that judgment with the Bucharest Court of Appeal.

5.  At a hearing on 15 September 2014 the Bucharest Court of Appeal allowed an application lodged by the prosecutor and, on the basis of Article 249 §§ 1 and 4 of the Code of Criminal Procedure (“the CCP”), extended the seizure measures to cover all the direct proceeds of the crimes forming the object of the trial – including those assets belonging to relatives of the defendants or to third parties. The court held that, in view of the large amount of damage allegedly caused by the crimes that had been the object of the trial, those preventive measures were necessary in order to pre‑empt the hiding, destruction or sale of assets that might otherwise serve to cover that damage. The court furthermore ordered that assets that might be subject to seizure be identified, and that their owners be summoned to appear before the court in order to protect their rights under the civil limb of Article 6 § 1 of the Convention.

6.  On 15 September 2014 the applicant Ştefan Eugeniu Iancu sold a plot of land subject to the above seizure measures to the applicant company ESV Euroferma S.R.L.

7.  At the next hearing on 19 September 2014 the court allowed an application lodged by one of the defendants and ordered the investigators to draw up a separate list identifying all assets that might be seized to cover the damage caused by that defendant in the event that his conviction was upheld. The court also requested a full update in connection with the enforcement of the seizure measures previously adopted.

8.  At the hearing on 1 October 2014 some of the people affected by the seizure measures were present as third-party interveners and lodged complaints. The court informed the defendants and the other parties present of the necessity to bring before the court all known owners of assets subject to seizure.

9.  At the same hearing, all documents concerning the seized property were made available to the parties, who were informed that anyone with an interest in so doing could lodge a complaint against the seizure measures. To that end, the Bucharest Court of Appeal ordered that a list of the immovable property that had been seized be sent to the National Property Registration Office (Agenţia Naţională de Cadastru şi Publicitate Imobiliară) and to the Commercial Companies Office (Oficiul Naţional al Registrului Comerţului) in order for the security measures to be entered in the land register and the commercial companies’ register and thus be made public. The list included numerous industrial buildings, houses, apartments and plots of land – some of them owned by the applicants. The seizure measures also concerned various bank accounts and shares in commercial companies belonging to the applicants and the applicant companies, as well as a motorcycle belonging to the applicant Ştefan Eugeniu Iancu. The court scheduled another hearing for 9 October 2014 so that the security measures could be entered in the land registry and all those with an interest in the relevant property could come forward and be heard. The court also ordered that the applicants Victor Octavian Iancu and Ştefan Eugeniu Iancu and the applicant company Uton S.A. be summoned to appear at the next hearing.

10.  At the next hearing on 9 October 2014, the applicants Ştefan Eugeniu Iancu and Victor Octavian Iancu, together with the applicant company Uton S.A., were represented by the lawyers of their choice. The applicants Ştefan Eugeniu Iancu and Victor Octavian Iancu, through their representative, contested the seizure measure, asserting that the property affected by the measure had been lawfully acquired by them; they submitted documents in order to prove that assertion. The applicant Ştefan Eugeniu Iancu furthermore argued that the land subject to the seizure measure – which was currently owned by the applicant company ESV Euroferma S.R.L. – had been acquired by him lawfully, having been given to him by a member of his family. He had subsequently sold the land to the applicant company ESV Euroferma S.R.L. – a company that he owned (see paragraph 6 above); therefore, there was no connection between this property and the crimes that had formed the object of the trial.

11.  The representative of the applicant company Uton S.A. argued that that company’s right to defend itself had been breached because it had been involved in the proceedings only at the appeal phase. He also argued that no connection had been established between the seized assets and the crimes forming the object of the proceedings and asked the court to lift the measure as having been wrongfully ordered against the assets of the applicant company Uton S.A.

12.  The court postponed the pronouncement of judgment in order to allow all interested parties to submit written comments.

13.  On 14 October 2014 the Bucharest Court of Appeal gave the final judgment in the case. The court upheld the defendants’ convictions for the crimes with which they had been charged in an extensively reasoned judgment of 276 pages, in which all the evidence – including expert reports, documents, numerous witness statements and transcripts of phone conversations – was thoroughly examined.

14.  The court also decided to maintain the seizure measures until the recovery of the damage caused by the crimes which were the object of the trial. In that regard, the court observed that the defendants had committed crimes that had resulted in serious financial losses to the State budget. It held that there was ample evidence proving that O.I. and A.M.I. had invested the direct proceeds of those crimes in various properties, which they had bought in the name of their relatives or on behalf of commercial companies (including the applicant companies) and which were subject to seizure in the instant case. The court furthermore held that the applicants Ştefan Eugeniu Iancu and Victor Octavian Iancu – who were the sons of the defendants and who had been present during the court proceedings – could not justify their contention that they had lawfully acquired the seized assets. Nor had it been proved by the documents submitted by the parties that the applicant companies ESV Euroferma S.R.L. (administered by the applicant Ştefan Eugen Iancu) and Uton S.A. (belonging to the defendant O.I.) had lawfully acquired the assets seized from them. In reply to the arguments raised during the proceedings (see paragraph 10 above), the court held that the procedure for putting in place the seizure measures had been in accordance with the law and that the procedural rights of all interested parties had been respected. Moreover, the relevant land registration authorities and the registry of commercial companies had been notified of the measures, and the owners of the seized property had been summoned to appear before the court and had made full use of their procedural rights. In addition, the court held that the seizure of direct proceeds of crime – like the seizure in the current proceedings – was in full compliance with the Constitution.Relevant domestic law and international documents

15.  A detailed description of the domestic law and practice and international documents concerning the seizure and confiscation of proceeds of crime can be found in Telbis and Viziteu v. Romania (no. 47911/15, §§ 35-44, 26 June 2018).

COMPLAINTS

16.  The applicants complained under Article 6 § 1 of the Convention that the proceedings that had culminated in the seizure of their assets had been unfair. Under the same Article, the applicant Victor Octavian Iancu also complained that the appeal bench dealing with his case had not been impartial.

17.  Relying on Article 13 of the Convention, the applicants in applications 18077/15, 18301/15 and 18321/15 complained that their case had not been examined at two levels of jurisdiction in the proceedings that had resulted in the seizure of their assets.

18.  The applicants in applications 18077/15, 18301/15 and 18321/15 also complained that the seizure of their property – allegedly without sufficient procedural guarantees – had been in breach of Article 1 of Protocol No. 1 to the Convention. Relying on Article 18 of the Convention, the applicant company in application 18952/15 also complained in substance under Article 1 of Protocol No. 1 that its property rights had been limited by the seizure ordered in the judgment of 14 October 2014 of the Bucharest Court of Appeal (see paragraphs 13 and 14 above).

19.  Under Article 17 of the Convention, all the applicants complained that the Bucharest Court of Appeal had referred to the provisions of Articles 6 and 13 of the Convention and Article 1 of Protocol No. 1 to the Convention in justifying the lawfulness of the seizure measures, which had in fact been unlawful.

THE LAWJoinder of the applications

20.  Given the factual and legal similarities of the applications, the Court decides to order their joinder (Rule 42 § 1 of the Rules of Court).Complaints under Article 6 § 1 of the Convention

21.  The applicants complained of a breach of their rights under Article 6 § 1 of the Convention, the relevant parts of which read as follows:

“In the determination of his civil rights and obligations ... everyone is entitled to a fair ... hearing ... by an ... impartial tribunal ...”Fairness of the proceedings (all applications)

22.  The applicants complained that the proceedings finalised with the judgment of 14 October 2014 (see paragraphs 13 and 14 above) had not been fair because the Bucharest Court of Appeal had ordered the seizure of their assets without their being informed of the evidence or elements justifying this measure, and without their having an opportunity to defend their rights within the framework of the criminal proceedings against O.I. and A.M.I.

23.  The Court reiterates its well-established case-law according to which in cases involving the seizure and confiscation of applicants’ property within the framework of criminal proceedings against third parties, these measures constitute an interference with the applicants’ right to the peaceful enjoyment of their possessions. As property rights are civil rights within the meaning of Article 6 § 1 of the Convention, that provision is applicable under its civil head (see Silickienė v. Lithuania, no. 20496/02, §§ 45-46, 10 April 2012, and Yldirim v. Italy (dec.), no. 38602/02, ECHR 2003-IV).

24.  The Court has previously examined the Romanian legal framework in respect of the issue of seizure and confiscation of the proceeds of crime from third parties and found it to be in compliance with the fair trial guarantees set out in Article 6 § 1 of the Convention (see Telbis and Viziteu v. Romania, no. 47911/15, §§ 53-58, 26 June 2018). In this regard, the Court has held that the domestic legislation gives third parties the opportunity, if they so wish, to fully participate in the proceedings in which a seizure or confiscation measure is decided (ibid., § 54).

25.  Turning to the current case, the applicants Ştefan Eugeniu Iancu (application no. 18301/15), Victor Octavian Iancu (application no. 18321/15) and the applicant company Uton S.A. (application no. 18952/15) were summoned to appear before the Bucharest Court of Appeal (see paragraph 9 in fine above) and were admitted as parties to the criminal proceedings against O.I. and A.M.I. (see paragraph 10 above and compare Silickienė, cited above, § 48, where the applicant was not a party to the criminal proceedings at all). The applicant company ESV Euroferma S.R.L. (application no. 18077/15), which during the criminal proceedings had acquired a plot of land subject to seizure from the applicant Ştefan Eugeniu Iancu (see paragraph 6 above), had its interests defended before the domestic court by that applicant (that is to say Ştefan Eugeniu Iancu), who was also its administrator (see paragraphs 1 and 10 above). Moreover, the Court notes that the documents in the case file indicate that the applicants in applications nos. 18301/15, 18321/15 and 18952/15 – including the applicant Ştefan Eugeniu Iancu on behalf of the applicant company ESV Euroferma S.R.L. – were represented by lawyers of their choice and had ample opportunity to present their arguments on points of fact and law before the Bucharest Court of Appeal, both in writing and orally at hearings (see paragraphs 8, 10 and 11 above). The domestic court duly examined and responded to their arguments in the light of the supporting evidence available in the case file and concluded that the seized assets constituted part of the direct proceeds of O.I.’s and A.M.I.’s criminal activity, and that the applicants and the applicant companies had not shown that those assets had been lawfully acquired by them (see paragraphs 13 and 14 above).

26.  In the light of the above, the Court considers that the Romanian authorities afforded the applicants reasonable and sufficient opportunity to adequately protect their interests. It follows that this complaint is manifestly ill‑founded and must be rejected, in accordance with Article 35 §§ 3 (a) and 4 of the Convention.Impartiality of the Court of Appeal (application no. 18321/15)

27.  The applicant Victor Octavian Iancu also alleged that the trial panel that ordered the seizure of his assets had lacked impartiality. The Court notes that there is no evidence in the file to indicate that the above‑mentioned applicant has exhausted the domestic remedies on this issue; more specifically there is no evidence that he ever submitted to the Bucharest Court of Appeal an application for the recusal of the panel in question.

28.  In view of the above, the Court finds that this complaint is inadmissible for non-exhaustion of domestic remedies and must be rejected, in accordance with Article 35 §§ 1 and 4 of the Convention.Lack of examination of the case at two levels of jurisdiction (applications nos.18077/15, 18301/15 and 18321/15)

29.  Relying on Article 13 of the Convention, the applicant company ESV Euroferma S.R.L. and the applicants Ştefan Eugeniu Iancu and Victor Octavian Iancu also complained that the case had not been examined at two levels of jurisdiction in the proceedings that had resulted in the seizure of their assets.

30.  The Court reiterates that by virtue of the jura novit curia principle it is not bound by the legal grounds adduced by the applicant under the Convention and the Protocols thereto and has the power to decide on the characterisation to be given in law to the facts of a complaint by examining it under Articles or provisions of the Convention that are different from those relied upon by the applicant (see Radomilja and Others v. Croatia [GC], nos. 37685/10 and 22768/12, § 126, ECHR 2018). Having regard to the nature and the substance of the applicants’ complaints, the Court considers that they fall to be examined under Article 6 § 1 of the Convention.

31.  The Court further reiterates that the Convention does not guarantee a right to a double degree of jurisdiction in civil matters. In fact, since it does not provide any right to an appeal in civil cases, Article 6 § 1 does not require States to set up courts of appeal or of cassation (see Mugliett v. Malta (dec.), no. 46661/12, § 37, 28 May 2013).

32.  It follows that this part of the applications is manifestly ill‑founded and must be rejected, in accordance with Article 35 §§ 3 (a) and 4 of the Convention.Complaint under Article 1 of Protocol No. 1 to the Convention

33.  The applicants argued that the seizure of their property without their having been convicted of anything – allegedly without sufficient procedural guarantees – had been in breach of Article 1 of Protocol No.1 to the Convention, which reads as follows:

“Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.”

34.  The Court firstly reiterates that it has already examined similar complaints and found them to be in compliance with the provisions of Article 1 of Protocol No. 1 to the Convention (see Telbis and Viziteu, cited above, §§ 72-82).

35.  In the current case, the measures adopted with respect to the applicants’ assets constituted control of the use of property within the meaning of the second paragraph of Article 1 of Protocol No. 1 to the Convention (ibid., §§ 69 and 72). The Court notes that the measures were prescribed by law, since they were ordered under Article 249 §§ 1 and 4 of the CCP (see paragraph 5 above). Furthermore, the Court considers that the measure in question – namely the seizure of property obtained through crime – was in line with the general interest of the community (see Iordăchescu v. Romania [Committee] (dec.), no. 32889/09, § 46, 23 May 2017).

36.  The Court therefore needs to examine whether a fair balance was struck between the legitimate aim and the applicants’ fundamental rights, and whether there were sufficient procedural guarantees in place.

37.  In this connection, the Court firstly notes that the proceedings during which the seizure measure was decided clearly formed part of a policy aimed at the prevention of crime, in relation to which the States enjoy a wide margin of appreciation with regard to both the existence of a problem affecting the public interest that requires measures of control and the appropriate way to apply such measures (see Arcuri and Others v. Italy (dec.), no. 52024/99, ECHR 2001-VII).

38.  The Court considers that its findings in respect of Article 6 § 1 (see paragraphs 23-26 above) are also relevant within the context of Article 1 of Protocol No. 1 as regards the question of whether the domestic proceedings afforded the applicants a reasonable opportunity to put their case to the authorities in order to effectively challenge the measures in question (see Telbis and Viziteu, cited above, § 78). On this point, the Court attaches importance to the fact that all the applicants – who owned property subject to seizure at the time of the adoption of the measure – were summoned to appear in the proceedings, and they were able to present their arguments in person and through legal representatives of their choice. It can also be seen from the documents in the file that the applicant company ESV Euroferma S.R.L. – which acquired property rights over a plot of land subject to seizure on the same date as that seizure (see paragraphs 5 and 6 above) – had its interests defended in the proceedings by the applicant Ştefan Eugeniu Iancu, its administrator and owner (see paragraphs 1 and 10 above). In addition, the domestic court dealt with – and rejected with sufficient reasoning – all the applicants’ arguments to the effect that the property in question had not been obtained through crime.

39.  The Court thus finds that there is nothing in the conduct of the proceedings to suggest either that the applicants were denied a reasonable opportunity to put their case or that the domestic court’s findings were tainted with arbitrariness. The seizure measure was applied by the domestic court on the basis of (i) evidence that the assets in question had illicit origins and (ii) the applicants’ inability to prove the contrary (see paragraphs 13-14 above; see also, mutatis mutandis, Telbis and Viziteu, cited above, § 79).

40.  Having regard to all the above considerations, and in particular the way in which the domestic courts fairly assessed the case, the Court finds that the proceedings in the present case cannot be considered to have been arbitrary. Having regard to the wide margin of appreciation enjoyed by States in the pursuit of a policy designed to combat crime, and to the fact that the domestic court afforded the applicants a reasonable opportunity to put their case through adversarial proceedings, the Court concludes that the interference with the applicants’ right to the peaceful enjoyment of their possessions was not disproportionate to the legitimate aim pursued (see, mutatis mutandis Bongiorno and Others v. Italy, no. 4514/07, §§ 44‑51, 5 January 2010, and Telbis and Viziteu, cited above, § 81) and does not disclose any appearance of a violation of Article 1 of Protocol No. 1 to the Convention.

41.  It follows that this complaint must be rejected as manifestly ill‑founded, in accordance with Article 35 §§ 3 and 4 of the Convention.Complaint under Article 17 of the Convention

42.  The applicants lastly complained that the Bucharest Court of Appeal had relied on the provisions of Articles 6 and 13 of the Convention and Article 1 of Protocol No. 1 to the Convention in order to justify the lawfulness of the seizure measure, in breach of Article 17 of the Convention, which reads as follows:

“Nothing in [the] Convention may be interpreted as implying for any State, group or person any right to engage in any activity or perform any act aimed at the destruction of any of the rights and freedoms set forth herein or at their limitation to a greater extent than is provided for in the Convention.”

43.  The Court observes that Article 17 of the Convention can only be applied in conjunction with the substantive provisions of the Convention. In so far as it refers to the State, Article 17 has been relied on in alleging that a State has acted in a manner aimed at destroying any of these rights and freedoms or limiting them to a greater extent than is provided for in the Convention (see Mozer v. the Republic of Moldova and Russia [GC], no. 11138/10, § 222, 23 February 2016).

44.  The Court considers that the complaint (as formulated by the applicants) – alleging a breach of Article 17 on account of the respondent State’s verification of the compliance of the measures adopted at the domestic level with Articles 6 and 13 of the Convention and Article 1 of Protocol No. 1 to the Convention – falls outside the scope of Article 17. In any case, the Court finds no evidence to suggest that the respondent State set out to deliberately destroy any of the rights relied on by the applicants in the present case, or to limit any of those rights to a greater extent than is provided for in the Convention.

45.  It follows that this complaint is manifestly ill-founded and must be rejected, in accordance with Article 35 §§ 3 (a) and 4 of the Convention.

For these reasons, the Court, unanimously,

Decides to join the applications;

Declares the applications inadmissible.

Done in English and notified in writing on 16 January 2020.

Andrea TamiettiFaris Vehabović
Deputy RegistrarPresident

APPENDIX

No.

Application no.

Lodged on

Applicant

Date of Birth

Place of Residence

Represented by

1

18077/15

10/04/2015

ESV EUROFERMA S.R.L.

Bucharest

Maria Carolina NIŢĂ

2

18301/15

10/04/2015

Ștefan Eugeniu IANCU

25/11/1993

Dobroieşti

Maria Carolina NIŢĂ

3

18321/15

10/04/2015

Victor Octavian IANCU

14/04/1997

Dobroieşti

Maria Carolina NIŢĂ

4

18952/15

10/04/2015

UTON S.A.

Bucharest

Tudoriţa TIGVA

 

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